We reviewed the histories of three patients with sebaceous carcinoma (two of the eyelid and one of the caruncle) who had had their tumors excised by surgeons experienced in the Mohs' technique. In each patient the tumor was considered totally excised. In one patient, residual intraepithelial pagetoid sebaceous carcinoma of the eyelid was detected incidentally when a reparative flap was placed. In the other two patients, invasive sebaceous carcinoma recurred, necessitating orbital exenteration; one patient has regional lymph node metastases. Because of the difficulty in detecting pagetoid spread on frozen sections and the multicentric nature of sebaceous carcinoma, we advocate managing these tumors by wide local excision, checking margins with high-quality permanent sections.