The isolated giant cell xanthomatic tumors arising from the tendon sheaths and other soft tissue of the extremities have been of clinical and pathologic interest for many years. Despite considerable study, their true pathologic classification is still in doubt, and unfortunately they are too often diagnosed giant cell sarcoma. The clinical picture of the tumors is well established, however, and should have some bearing on the consideration of the pathology. They are characterized microscopically by the presence of two striking elements, the foreign body giant cell and the foamy cell; once seen, this combination is never forgotten. When one considers that for many years both these cells have been shown to be nonspecific and to occur in the most diverse types of lesions and that their presence denotes the fact that foreign material is present, one must look for other factors to determine the malignancy or benignancy of the tumor.