Nevus sebaceus is a benign, congenital, hamartomatous tumor with a combination of abnormalities involving the epidermis, hair follicles, sebaceous glands and sweat glands. It usually presents at birth; somewhat regresses in childhood; grows and becomes more prominent during puberty; and during adulthood may develop benign and, less commonly, malignant tumors. This paper will discuss the natural history of nevus sebaceus by describing its clinical and pathologic features to enable the clinician to arrive at a correct diagnosis. The benign and malignant tumors that have been reported to develop within a nevus sebaceus will be enumerated. In addition, this paper will attempt to provide a clearer perspective in the management of nevus sebaceus by discussing the advantages and disadvantages of the treatment options available.