Lipomatous tumor is least common in the oral cavity. We present a case of atypical lipomatous tumor arising in the lower lip of an 81-year-old male. Clinical diagnosis was mucocele. The tumor measured 12 mm in diameter with a round shape. It was solid, firm, myxomatous and translucent with a small yellowish focus in the central portion. Histologically, the tumor was a circumscribed and well-encapsulated mass with prominent myxoid matrix. The central minor portion showed a well-differentiated liposarcoma. In the myxoid area, lipoblasts and large atypical cells with dense chromatin including floret-like giant cells were seen in abundance. Atypical lipomatous tumor may be indistinguishable from pleomorphic lipoma and its distinction from the latter is based on location as well as relative abundance of floret-type giant cells and lipoblasts. According to its abundance in lipoblasts over floret-like cells, pleomorphic lipoma-like area in our case could also be a part of atypical lipomatous tumor. It may be possible to interpret myxoid change in our case as to represent a superficial counterpart of myxoid malignant fibrous histiocytoma-like change reported in the retroperitoneal lesion.