Cutaneous lymphoid hyperplasia (CLH) has been proposed to be the benign end of a continuum of lymphoproliferative disorders with cutaneous lymphoma at its malignant extreme. An intermediate condition, known as "clonal CLH," was first recognized by us and shown to be a transitional state capable of eventuating in overt lymphoma. To better determine the prevalence of dominant clonality and risk of lymphoma among CLH cases, we studied the immunohistology and clonality of fresh-frozen samples from 44 CLH patients referred to a multidisciplinary cutaneous lymphoproliferative disorders program. Using a large panel of lymphoid markers, the cases were divided into 38 typical mixed B-cell/T-cell type CLH and 6 T-cell-rich type (T-CLH), the latter containing > 90% T cells. Of the 44 patients, 38 had solitary or localized lesions (4 cases of T-CLH), and 6 had regional/generalized lesions (2 cases of T-CLH). Forty cases were of idiopathic etiology. Suspected etiologies among 4 other cases included mercuric tattoo pigment, doxepin, clozapine, and bacterial infection. Immunoglobulin heavy chain (IgH) and T-cell receptor (TCR)-gamma gene rearrangements (GR) were studied using polymerase chain reaction assays, which are approximately 80% sensitive. Overall, 27 cases (61%) showed clonal CLH: 12 IgH+ (27%; 3 cases of T-CLH); 13 TCR+ (30%; 1 case of T-CLH); and 2 IgH+/TCR+ (4%; neither case was T-CLH). Two cases (4%; 1 case of T-CLH) progressed to cutaneous B-cell lymphoma. Both of these patients presented with regional lesions. Our findings indicate that clonal overgrowth is common in CLH, links CLH to lymphoma, and probably involves both B- and T-cell lineages (although TCR GR by B cells and vice versa could not be ruled out). The high prevalence of dominant clonality in our series may have resulted from the sensitivity of our PCR assays as well as patient selection.