Squamous cell carcinoma arising within bone is a rare lesion and is only seen essentially in the jaw and skull bones. Review of the medical literature showed that malignant change has been described in epidermoid cyst particularly in neurosurgical and orthodontic literature. However, no cases have been described in long bones as yet. Diagnosis of these tumours based on radiology and histology can be difficult and primary tumour elsewhere must be excluded. Here , a case of well differentiated squamous cell carcinoma arising from apparently a pre-existing intra-osseous epidermoid cyst in the distal tibia of a 45-year-old woman is reported. Initially treated with curettage and impact bone graft, then subsequently when the histopathology confirmed the above diagnosis, below knee amputation was performed. The differential diagnosis from other bone tumours with epithelial differentiation such as adamantinoma is discussed. This represents a rare primary neoplasm of bone of unknown histogenesis and also warns us to always try to get a histological diagnosis of what could look like clinically and radiologically a benign cyst.