Twenty-six cases of a newly recognized form of vascular tumor are presented. The tumor may occur at any age, has a male predominance, and develops preferentially in the dermis and subcutaneous tissues of the distal extremities. Histologically it combines the features of both a cavernous hemangioma and Kaposi's sarcoma. It is composed of thin-walled cavernous vessels which may be dilated, partially collapsed, or filled with organizing thrombi and phleboliths. These areas are intimately associated with spindled areas reminiscent of Kaposi's sarcoma. The spindled areas differ from Kaposi's sarcoma by the presence of occasional epithelioid endothelial cells, which sometimes display vacuolization. Follow-up information in 14 cases indicates that nine patients experienced "recurrences." One patient, who also received radiotherapy, developed regional lymph node metastasis 40 years after diagnosis and following 19 recurrences. No patient, however, has died of his disease, despite relatively limited surgical excision. The term "spindle cell hemangioendothelioma" is suggested for this vascular tumor of low-grade malignancy.