We report 2 cases of an unusual central nervous system lesion involving the gyrus rectus and characterized by well-differentiated epithelial and mesenchymal components. One patient was a 30-year-old woman, and the other was a 42-year-old man. Both presented with seizures. Radiologically, the lesions were solid, with ill-defined margins and increased signal on T2-weighted MRI. Both were contrast enhancing. There was no significant mass effect or edema. Histopathologically, the epithelial component was characterized by a tubule-forming, stratified epithelium. The lumina of the tubules were lined, in some areas, by a distinct layer of mature keratinocytes. Smooth muscle actin-immunoreactive myoepithelial cells were present in the basal layer, indicating glandular differentiation. Some lumina were cystically dilated and contained anucleate squames and/or PAS-positive material. In some areas, the epithelial structures were separated by reactive glial tissue resembling pilocytic astrocytoma, with prominent, piloid processes, Rosenthal fibers, and gemistocytic astrocytes. In other areas, glial nuclei formed small clusters reminiscent of subependymoma, but no glioma was identified in either case. Tissue resembling mature adipose was present focally. No mitotic figures were identified. Follow-up interval of up to 2 years showed no evidence of recurrent tumor. By location and histologic features, this lesion appears to represent a rare, distinct clinicopathologic entity, perhaps derived from misplaced cranial neural crest cells.