BACKGROUND Dedifferentiation is a histologic progression of a neoplasm from low grade to high grade histology. It occurs in tumors of the retroperitoneum and in those undergoing treatment. This usually occurs in the setting of radiation or chemotherapy or as a spontaneous process over a long period. The features of dedifferentiation can be toward any mesenchymal element of the underlying neoplastic process. METHODS We report the cytologic features of a dedifferentiated liposarcoma arising in a 76-year-old man who had a history of well-differentiated liposarcoma. Papanicolaou- and Diff-Quik-stained smears from a radiologically guided fine needle aspiration biopsy showed a hypercellular sample. The smears showed a mixed population of cells. There were multinucleated, pleomorphic giant cells with abundant cytoplasm, smaller clusters of cells with a high nuclear/cytoplasmic ratio and cells with spindled and elongated nuclear features. The follow-up surgical resection specimen showed a dedifferentiated liposarcoma with strong and diffuse immunoreactivity to vimentin, desmin and CD68 in the large, pleomorphic cells; focal and weak immunoreactivity to smooth muscle actin and S-100 in these cells; and strong and focal immunoreactivity to desmin, smooth muscle actin and muscle-specific actin in the spindle cells. This supports the dedifferentiated components of this tumor to be of fibrohistiocytic and leiomyosarcomatous differentiation. CONCLUSIONS Dedifferentiation of a well-differentiated liposarcoma should be entertained in the setting of a mass lesion in the retroperitoneum in patients with prior histories of well-differentiated liposarcoma. The radiologic features of a particular neoplastic process can be very helpful in determining the nature of this process.