A case of congenital dermoid fistula of the lower lip is presented. The lesion consisted of a major cystic portion, a proximal tubelike extension that opened in the lower lip as a small sinus (pit) near the left commissure, and a distal cordlike extension that entered into the left mental foramen. The cystic cavity was lined with keratinizing stratified squamous epithelium, and many sebaceous glands, sweat glands, and hair follicles were seen subcutaneously. The differential diagnosis and the pathogenesis of the lesion are also discussed.