Two patients with intraepithelial sebaceous neoplasia of the conjunctiva and cornea without an underlying invasive carcinoma are described. This intraepithelial disease displays the same cytologic features found in the conjunctival epithelium of patients with an invasive sebaceous carcinoma. The natural history of this incipient carcinoma is unknown. Anecdotal evidence indicates that some lesions can remain in situ for prolonged periods without undergoing transformation to an invasive carcinoma. The diagnosis of intraepithelial sebaceous neoplasia of the ocular surface is established by excluding an occult invasive carcinoma with appropriate biopsies.