BACKGROUND: Sebaceous lymphadenoma is a rare benign salivary gland tumour of uncertain histogenesis. So is synchronous occurrence of two benign or malignant neoplasms. CASE-REPORT: 68-year-old female presented with right side parotid swelling associated with pain and gradual increase is size. Fine needle aspiration cytology of parotid swelling was suggestive of pleomorphic adenoma. Total conservative parotidectomy was performed and histopathology of the specimen revealed sebaceous lymphadenoma with squamous cell carcinoma. CONCLUSIONS: Sebaceous lymphadenoma and squamous cell carcinoma are two rare benign and malignant neoplasms arising in parotid gland. Synchronous occurrence of these two entities has not been reported.