A 74-year-old man was found to have a 1 cm, slightly elevated and flat, red mucosal lesion of the descending colon. An endoscopic biopsy showed a structure characteristic of a tubular adenoma. The surgical specimen revealed an inverted, transmural, solid and cystic lesion. The superficial (intra-mucosal) component of the neoplasm was histologically characteristic of a flat adenoma, showing epithelial dysplasia. However, the contiguous deep component was a well-differentiated adenocarcinoma extending to the serosa and demonstrating the unusual features of a circumscribed lobulated topography and the absence of an inflammatory/desmoplastic stromal reaction. Endophytic malignant transformation within a flat adenoma should be distinguished from conditions of misplaced glandular epithelium such as localized colitis cystica profunda. Complete and full mucosal thickness endoscopic snare removal is indicated in order to assess the degree of epithelial dysplasia and detect endophytic malignant transformation.