Familial leukonychia with sebaceous cysts is a rare autosomal dominant genetic condition, previously reported in four families. Molecular basis of the disorder is unknown. We report on a five-generation family with subtotal leukonychia and sebaceous cysts. Six individuals were affected, five women and one boy. One of the women exhibited a cervical ependymoma and bilateral multiple inoperable acoustic neuromas. These tumours have never been reported in association with leukonychia and may represent an uncommon severe complication of the syndrome.