Squamous cell carcinoma arising in an odontogenic cyst is uncommon. The diagnosis of carcinoma arising in a cyst requires that there must be an area of microscopic transition from the benign epithelial cyst lining to the invasive squamous cell carcinoma. We report a histopathologically proven case of squamous cell carcinoma arising in a residual mandibular cyst in a 54-year-old woman.