An infant had a 3 x 1.5-cm congenital, slow-growing, lobulated tumor below the right inferior eyelid. The mass transilluminated, and needle aspiration yielded tears. Dacryocystography showed a large cystic area connected with the lower lacrimal canaliculum. Histologically, the tumor proved to be a dermoid cyst. This association has not been reported previously. Surgical excision and suture of the pedicule resulted in permanent cure.