Benign schwannoma (neurilemoma) has various morphologic patterns that may cause problems in differential diagnosis. Although an epithelioid variant of malignant schwannoma simulating carcinoma and melanoma is well recognized, a benign counterpart has not yet been defined. In the current study, we describe five cases of benign epithelioid schwannoma that were in the subcutis (four cases) and the neck of the urinary bladder (one case). The tumors occurred in adults 28-73 years of age, were 1-4.5 cm in diameter, were well circumscribed and cellular, and were composed of epithelioid cells arranged in cords and nests. The benign nature of the lesions was evident by a constellation of features, including small size, sharp circumscription, bland morphology, low proliferative activity (four of five had < or =1% Ki67 immunostaining), and a benign clinical course after either marginal or intralesional excision. All cases had some features of classic schwannoma light microscopically and a high degree of Schwann cell differentiation both ultrastructurally and immunohistochemically. The recognition of benign epithelioid schwannoma is important because it may be misinterpreted as a malignant neuroectodermal, mesenchymal, epithelioid, or melanocytic tumor.