Pseudoepitheliomatous hyperplasia (PEH) is a benign condition, characterized by hyperplasia of the epidermis and adnexal epithelium, closely simulating squamous cell carcinoma. PEH may be present in a number of conditions characterized by prolonged inflammation and/or chronic infection, as well as in association with many cutaneous neoplasms. Herein, we review different inflammatory, infectious, and neoplastic skin diseases, in which florid epidermal hyperplasia is a prominent histopathologic feature, and introduce a systematic approach in the interpretation of PEH.