Chondroid lipoma was recently described as a unique, benign, pseudosarcomatous lipomatous tumor with chondroid features, often simulating liposarcoma and myxoid chondrosarcoma. An extended histochemical and immunohistochemical analysis of 13 cases, including the proliferation markers, proliferating cell nuclear antigen (PCNA) and Ki67, as well as ultrastructural studies of eight cases were performed with the intent of further elucidating its differentiation. Staining with toluidine blue and alcian blue at controlled pHs indicated the presence of chondroitin sulfates within the myxohyaline matrix. Immunohistochemically, all tumors were positive for vimentin and S100 protein. Focal immunoreactivity for cytokeratins was seen in 3 of 13 cases; one of these also had intracytoplasmic tonofilament bundles ultrastructurally. Scattered tumor cells stained for CD68 antigen with KP1 in 6 of 13 cases. None of the tumors stained for epithelial membrane antigen (EMA) or alpha-smooth muscle actin. Collagen IV immunostains showed a network of fibrils encircling individual tumor cells in 10 of 13 cases. Intracytoplasmic staining for laminin was found in 9 of 13 cases. Ultrastructurally there was a spectrum of differentiation, ranging from primitive cells sharing features of prelipoblasts and chondroblasts, to lipoblasts and preadipocytes, to mature adipocytes. A striking ultrastructural feature in 5 of 8 cases was the presence of knob-like protrusions of the cell membrane, which contained granular, amorphous, and fibrillar material that appeared to be extruded into the adjacent matrix. The myxohyaline matrix had ultrastructural features of cartilage. Numerous mitochondria and lysosomes were absent, indicating that chondroid lipoma is neither a hibernomatous lesion nor a lipogranuloma. Ki67 immunoreactivity was typically very low and detected only in the more primitive cell population. The findings in this analysis indicate that chondroid lipoma is a pseudosarcomatous lipogenic neoplasm with a unique cell population possessing predominantly features of embryonal fat and, to a lesser extent, embryonal cartilage.