We report a 39-year-old Japanese woman with a 30 x 10 mm, skin-colored, soft, hairless, irregularly elevated plaque in the left retroauricular area. Histologically, it consistently showed features of atypical hair follicles; some showed immaturely developed basaloid epithelial islands invaginated with condensed stromal cells, and others were replaced or associated with solid strands, branching cords, or lace-like networks of undifferentiated basaloid cells. Although the clinical appearance of a typical localized basaloid follicular hamartoma is a plaque of alopecia, this case seems to be a variant, because the histological findings are so characteristic of the entity. The relationship of basaloid follicular hamartoma to other hair-follicle derived tumors is also considered.