During the past 10 years discrete middle ear congenital cholesteatomas have been detected with greater frequency in young children. The increased recognition of this condition is probably related to the pediatricians' greater awareness of this defect, their improved facility with pneumatic otoscopy, and effective audiometric and tympanometric screening procedures. This early detection while the lesions are small and localized facilitates their surgical removal. Clinically, it would appear that congenital cholesteatomas can be subdivided into two categories according to their anatomic locations. The anterior lesions present as an isolated pearl that arise from an area on the anterior surface of the malleus, are usually associated with normal hearing, and have pneumatized mastoids. The posterior lesions do not seem to originate from a clearly defined anatomic area, have a higher incidence of sclerotic mastoids, and erode the ossicular chain commonly producing a hearing loss. The anterior middle ear cholesteatoma probably arises from a persistent epidermoid formation, a structure that normally is present during fetal development of involutes by the 33rd week of gestation. The origin of cholesteatomas arising in the posterior middle ear space remains more controversial.