Causes

The surface of your skin (epidermis) is made up of a thin, protective layer of cells that your body continuously sheds. Most epidermoid cysts form when these cells move deeper into your skin and multiply rather than slough off. Sometimes the cysts form due to irritation or injury of the skin or the most superficial portion of a hair follicle.

The epidermal cells form the walls of the cyst and then secrete the protein keratin into the interior. The keratin is the thick, yellow substance that sometimes drains from the cyst. This abnormal growth of cells may be due to a damaged hair follicle or oil gland in your skin.

Many people refer to epidermoid cysts as sebaceous cysts, but they're different. True sebaceous cysts are less common. They arise from the glands that secrete oily matter that lubricates hair and skin (sebaceous glands).