Verruciform xanthoma, an uncommon, benign lesion with characteristic histopathological features, usually develops on the oral mucosa or genital area. We present an unusual case of verruciform xanthoma observed on the inguinal skin of a 52‐year‐old healthy man along with an underlying cystic component. The superficial lesion was a pedunculated nodule with a fissured surface and an 18‐mm mound‐like pigmented tumor underneath it. The histopathologically deep lesion was continuously attached to the superficial lesion. It was composed of fistula or sinus‐like spaces and covered with acanthotic epithelium. The epidermis and upper dermis of both lesions showed identical histopathological findings: varying degrees of acanthosis, elongation of rete ridges, eosinophilic parakeratotic layer extending toward the dermis, and densely infiltrating foam cells confined to the papillary layer of the dermis. This finding of a cystic component in the deep dermis expands the histopathologic features of verruciform xanthoma.