A slowly growing malignant tumor of the nail unit in a 74-year-old female is reported. At light microscopy, the tumor was composed of small keratinous cysts with abrupt central keratinization, and of solid nests and strands of atypical keratinocytes filling the dermis and penetrating the phalangeal bone. In our view, this can be regarded as the malignant analog of the keratin cysts arising from the nail bed epithelium, as first reported by Samman in 1959. Since, according to several authors, the nail bed epithelium is comparable to the outer root sheath of the follicle and since the reported tumor showed some analogies with malignant proliferative trichilemmal cyst, it is suggested that this new entity be designated as malignant proliferating onycholemmal cyst.