BACKGROUND Verruciform xanthoma (VX) holds two basic pathogenic interests: (1) Why and how do macrophage foam cells accumulate exclusively in the sub-basal papillae? and (2) What underlies the disease chronicity? Moreover, an unsolved question is which came first - epithelial hyperplasia or foam cell collection? METHODS We analyzed 36 oral mucosal lesions to dissect a series of linked cellular changes in VX using immunohistochemical and ultrastructural techniques. RESULTS Macrophage scavenger receptor-1 (MSR-1), monocyte chemoattractant protein-1 (MCP-1), CCR2, and oxidized low-density lipoprotein (ox-LDL) were all expressed by foam cells. VX epithelium showed reactivity for MCP-1, HLA-DR and IL8 in varying degrees, and showed a nearly 40% reduction in Langerhans cell density. In sub-epithelial inflammatory infiltrates, CD8+ T cells preponderated (>70%), but only a minority were positive for granzyme B (<1%). Keratinocyte/basal lamina complex exhibited disruption of basal lamina, squamatization and cytolysis of basal cells, fragmentation of desmosomes, and intraepithelial migration of macrophages. In severely inflamed papillae, necrotic foam cells were scavenged by adjacent macrophages. CONCLUSIONS Under synergistic regulation of T cells, MCP-1/CCR2-mediated macrophage recruitment in the sub-basal papillae and the lysosomal engulfment of epithelial lipids by MSR-1-bearing macrophages may be central in VX formation. Once developed, ox-LDL-induced foam cell necrosis and macrophage-dependent debris disposal may cyclically perpetuate VX.