Pagetoid dyskeratosis (PD) is considered a selective keratinocytic response in which a small part of the normal population of pale keratinocytes is induced to proliferate. PD has been found incidentally in the squamous epithelium of the skin and mucosas in various locations, but not in the nipple. In cases in which PD cells are conspicuous, there is the danger of overdiagnosis. In a retrospective study, we describe the location and incidence of PD and other pale cells in the nipple epidermis, in 288 mastectomy specimens from women operated on for breast carcinoma, in situ or infiltrating, selected consecutively from our histopathologic files. In addition to the conventional histologic methods an immunohistochemical study was performed in selected cases. PD was found in 184 (63.9%) cases and was a prominent finding in 37 (12.8%) cases. Toker cells (TCs) were identified by standard light microscopy in 24 (8.3%) nipples. Paget carcinoma cells (PCCs) were found in 12 (4.2%) cases, and in 9 (3.1%) they were an incidental finding. The immunohistochemical profile of each type of pale cells was as follows: PD cells, EMA-,LMWCK-,CK7-,HMWCK+, CEA-, HER2/neu protein-, HMB45-, HPV-; TCs, EMA+, LMWCK+, CK7+, HMWCK-, CEA-, HER2/neu protein-, HMB45-, HPV-; PCCs, EMA+, LMWCK+, CK7+, HMWCK-, CEA+, HER2/neu protein+, HMB45-, HPV-. In conclusion, friction may be the stimulus for the appearance of PD cells. PD cells must be distinguished from TCs, PCCs, clear cells of Bowen's disease, pagetoid melanoma cells, cells of clear cell papulosis, koilocytes, artifactual clear cells, and glycogen-rich squamous cells. A combination of immunohistochemical markers is useful for this distinction; however, routine histologic study is usually adequate for recognizing PD. Pathologists should be familiar with the histologic features of PD in the nipple epidermis to avoid misdiagnosis.