The atypical lipomatous tumor (ALT)/well-differentiated liposarcoma (WDLPS) is a locally aggressive subtype of liposarcoma unless dedifferentiation occurs. The mechanism driving this progression is not clear. Loss of p16 is believed to be an early and critical event in tumor progression. Gene silencing by methylation of p16INK4a gene promoter has been reported in several soft tissue sarcomas. The aim of this study is to study the role of p16INK4a gene promoter methylation and p16 expression in tumor progression (dedifferentiation) and recurrence of ALT/WDLPS. Four cases of dedifferentiated liposarcomas (DDLPS) and three cases of recurrent well-differentiated liposarcomas (WDLPS) were collected, and methylation status of p16INK4a gene promoter was analyzed using methylation-specific PCR (MSP) on DNA extracted from paraffin blocks. p16 expression was examined by immunohistochemistry on the same blocks. Methylation of p16INK4a gene promoter was seen in the dedifferentiated (DD) components only, in two out of four (2/4, 50%) DDLPS. The other two DDLPS and three recurrent WDLPS were not methylated. Both WD and DD components in all four DDLPS cases showed strong nuclear p16 expression. All three recurrent WDLPS showed positive p16 expression with similar intensity between primary and recurrent tumors. Even though linear correlation between p16 promoter hypermethylation and p16 protein expression was not present, there appears to be a role for p16INK4a gene promoter hypermethylation in DDLPS and not in recurrent WDLPS.