Eight patients had multiple xanthomatous plaques and subcutaneous nodules that had a predilection for the periorbital area, flexures, and trunk and that tended to ulcerate. Skin biopsy specimens showed a combination of xanthogranulomatous nodules with necrobiosis. All patients had an accompanying dysproteinemia, which was a monoclonal IgG paraprotein in six. Hyperlipidemia, low serum complement, and cryoglobulinemia were variable features. Five patients had leukopenia. Bone marrow examination showed myeloma in two patients, a lymphoproliferative process in one, and some atypical plasma cells in two. Cutaneous necrobiotic xanthogranuloma is a distinctive histologic pattern most frequently related to plasma cell dyscrasias, and it should be distinguished from normolipemic plane xanthoma and other necrobiotic granulomas.