Thymoma is an uncommon tumor of childhood. Stage of the tumor is an independent prognostic factor for survival. Surgery is the treatment of choice for stage I and stage II tumors. Chemotherapy is reserved for patients with refractory or metastatic disease. Thymomas are moderately radiosensitive. However, radiation therapy is not an attractive option for children due to its side-effects on developing organs. The authors describe 2 children with completely encapsulated thymoma who were successfully treated with surgery alone. Both patients remain free of disease 3 years after surgery. One of the patients also has nevus sebaceous. The authors also discuss the possible association between the two disease entities.