Peripheral dentinogenic ghost cell tumor is a rare tumor with only 24 cases previously described in the English literature. The majority of cases have been reported to occur in the anterior part of the jaws. A case occurring in posterior (molar region) of the mandible in a 75-year-old edentulous woman is reported. The patient presented with a nodular swelling in the left mandible that showed erosion (saucerization) of the underlying bone radiographically. On microscopy, the tumor showed mainly solid epithelial islands resembling ameloblastoma in fibrous connective tissue. The islands were associated with ghost cells and dysplastic dentin. This report includes the clinical, radiographic, and microscopic features of the patient, in addition to the review of the English literature on the tumor.