Epidermal inclusion cysts are common, benign, intradermal, or subcutaneous lesions typically asymptomatic ranging from 1 to 4 cm in size. Transformation to squamous cell carcinoma is rare. Neoplastic change in these cysts can be associated with prominent symptoms such as pain, rapid growth, or ulceration. We present a case of a 70-year-old male, with a giant gluteal swelling masquerading as soft tissue sarcoma. The clinical, radiological, and histopathologic findings are described. We present this case because it is rare for a benign epidermal inclusion cyst to be unusually large and malignant transformation in such cysts is rarely reported. We also recommend that the entire cyst wall is to be removed without disruption and to be subjected for a thorough histopathological evaluation.