Intraepidermal carcinoma, characterised by dysplastic keratinocytes (especially in lower third of the epidermis). In some cases the acantholysis is present (lower part of the epidermis). Parakeratosis, sometimes hyperkeratosis.

Several forms: atrophic, acantholytic, hyperkeratotic.

Common features are dysplastic epithelium with mitotic activity and loss of dermal polarity. The dysplastic epithelium usually spreads down into the epithelium of the hair follicles.

Later infiltrative growth and transition into low grade squamous carcinoma.