BACKGROUND: Keratoacanthoma (KA) is an extraordinary entity. Once considered a benign neoplasm that resembled a highly malignant one (pseudomalignancy), it is now viewed in an opposite light as a cancer that resembles a benign neoplasm (pseudobenignity). OBJECTIVE: The goal was to delineate the malignant potential of this neoplasm based on the author's experience and a review of recent data and research and to emphasize the KA as a possible part of an autosomal dominant familial cancer syndrome, the Muir-Torre syndrome. METHODS: This is a review of the literature. RESULTS: In this work, the KA is reviewed with recent advances emphasized. CONCLUSION: KA is an abortive malignancy that rarely progresses into an invasive SCC. The KA may serve as a marker for the important autosomal dominant familial cancer syndrome, the Muir-Torre syndrome, as a result of a defective DNA mismatch repair gene.