A neoplasm demonstrating both pancreatic and hepatic phenotypes is described. The tumor, from a 53-year-old woman with the syndrome of subcutaneous fat necrosis and arthropathy, was studied histologically, immunohistochemically, ultrastructurally, and biochemically. The clinical features of this case can be explained by the production of large amounts of lipase by the tumor. The hepatocellular properties of the tumor included characteristic morphology and the synthesis of catalase. The pancreatic properties of the tumor included the production of pancreatic lipase. This neoplasm would appear to be analogous to animal models in which the transdifferentiation of pancreatic acinar cells and hepatocytes has been demonstrated. Although the bulk of the tumor was present in the liver, the authors believe the tumor arose from the pancreas. The distinction between differentiation and site of origin of tumors is discussed.