Epidermoid cysts, also called sebaceous cysts, are benign (non-cancerous) skin cysts formed by an outpouching from the hair follicle. Most commonly, epidermoid cysts are found on the genitals, chest, and back; but, they also can occur in other areas of the skin. In general, epidermoid cysts have a round appearance.A dark portion of the cyst is visible on the skin. If the cysts become infected, they will become red and tender.ysts are noncancerous, closed pockets of tissue that can be filled with fluid, pus, or other material. Cysts are common on the skin and can appear anywhere. They feel like large peas under the surface of the skin.