A rare case of dedifferentiated liposarcoma (well-differentiated liposarcoma with an inflammatory malignant fibrous histiocytoma (MFH)-like anaplastic component) occurring in a 69-year-old male is presented. The patient had noticed a dull pain in his left loin and thigh for about 1 month. Computed tomography examination revealed a low-density mass lesion, measuring about 6 cm in diameter, in the left iliopsoas muscle, and it was surgically removed. Grossly, the lesion was composed of an encapsulated, soft, whitish mass and an adjacent, well-demarcated, yellowish hard nodule, measuring about 2.5 cm in diameter. Microscopically, both lesions showed features of an inflammatory variant of MFH and a sclerosing type of well-differentiated liposarcoma, respectively. To our knowledge, only two cases of dedifferentiated liposarcoma combined with inflammatory MFH as a dedifferentiated component have been recorded in the literature. The salient feature of the present case is a systemic inflammatory reaction, as shown by prominent leukocytosis (up to 73,900/mm3) and the elevated serum value of C reactive protein (up to 26.0 mg/dL), which were transiently reduced after surgery. The inflammatory reaction was suggested to be induced by cytokines, such as granulocyte colony-stimulating factor and interleukin-6, which were probably produced by the tumor cells in the present case, because the elevated serum values of those cytokines were decreased after surgery.