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We report 51 cases of a previously undescribed tumor of the distal extremities that is often mistaken for an inflammatory or infectious process, Hodgkin's disease, or various sarcomas. These lesions developed in patients of all ages (range, 4-81 yr; median, 40 yr) and affected the sexes nearly equally (27 men, 24 women). They presented as a painless mass of the fingers (14 cases), hand (11 cases), wrist or arm (10 cases), toe or foot (8 cases), or lower leg (5 cases), usually within the subcutaneous tissues. Grossly, they were infiltrative, multinodular masses characterized by a dense chronic inflammatory infiltrate that merged with a stroma, which varied from densely hyaline to focally myxoid and contained sheets of short spindled to rounded epithelioid cells. Focally, the epithelioid cells were extremely large with bizarre, vesicular nuclei and macronucleoli resembling Reed-Sternberg cells or virocytes. Despite the level of atypia, mitotic activity was low. The tumor cells consistently expressed vimentin but lacked a variety of other mesenchymal, epithelial markers, e.g., S100 protein, desmin, actin, neuron-specific endolase, epithelial membrane antigen, HMB-45, CD34) and leukocyte markers (CD15, CD30, CD45). Keratin was noted focally and weakly in four cases and CD68 focally in six cases, the latter suggesting that the cells had acquired phagocytic properties. Immunostains for cytomegalovirus were negative. Polymerase chain reaction for Epstein-Barr virus showed amplification levels consistent with latent infection in 4 of 10 cases, but no cases showed levels consistent with active infection. All of the bacterial and viral cultures were negative. Follow-up information was available in 27 cases. Recurrences developed in six patients (interval, 15 mo-10 yr), but there were no metastases or tumor-related deaths. In one patient, progressive proximal extension up the arm was noted. Although the most common submitting diagnosis was that of an inflammatory or infectious process, the negative studies for infectious agents, clinical behavior with local recurrences, immunophenotypic profile, and cytologic atypia support the idea that these are unusual mesenchymal neoplasms with at least the potential for local recurrence. It remains to be investigated whether with time these lesions will prove to have metastatic potential.