A correlative cytologic and histologic study of 12 benign lipomatous tumors and 15 liposarcomas (well-differentiated, myxoid, round cell, and pleomorphic) is presented. In two cases the fine needle aspiration material was embedded in Epon for light and electron microscopic examination. Good correlation was found between the histologic and cytologic findings in the fine needle aspiration material. Pitfalls in the cytologic diagnosis of regressively changed lipoma, intramuscular lipoma, angiolipoma, hibernoma, and lipoblastoma, which may lead to an erroneous diagnosis of liposarcoma, are illustrated. The cytologic appearances of the liposarcomas varied with histologic type, although in all of these tumors the main criterion was the presence of atypical multivacuolated lipoblasts with characteristically scalloped nuclei. Staining of the aspirated material with Alcian blue at varying pH levels for characterization of the glycosaminoglycan content may help in the distinction of myxoid liposarcomas from myxoid chondromatous tumors and chordomas. May-Grünewald-Giemsa staining is considered the most useful staining method, while fat staining is considered of limited or no value in the cytologic diagnosis of lipomatous tumors. Epon embedding of fine needle aspirates for light and electron microscopic examination seems to be a useful diagnostic technique.