The genetic events responsible for tumor progression may be defined by careful analysis of genetic changes in well-chosen tumors which contain distinct cell populations representing each stage of progression. Here we report a case of a trichilemmal carcinoma arising in the wall of a proliferating trichilemmal cyst (PTC). DNA was isolated from microdissected areas of the PTC and the carcinoma respectively, and PCR-based microsatellite loss of heterozygosity (LOH) analysis as well as p53 gene sequencing performed. A CGA to TGA nonsense mutation at codon 306 in exon 8 of the p53 gene was found in both samples. LOH analysis showed that the PTC retained chromosome arm 17p (where the p53 gene resides), whereas the carcinoma was associated with the loss of this allele. All the other loci examined were retained including 3p, 9q, 13q and 17q in both tumor parts. The results confirm a common clonal origin of the PTC and the trichilemmal carcinoma, and strongly suggest that the complete loss of the wild-type p53 is a critical event responsible for malignant transformation in this particular case.