The paper addresses the sebaceous nevus of Jadassohn, which is a congenital defect of pilosebaceous units with the occurrence of hamartomas with their possible transformation in post-pubertal age into secondary tumors, including malignant ones. The nevus development goes through three stages, associated with hormonal changes during puberty due to the increased concentration of androgen receptors in the nevus tissue. The features of clinical, dermatoscopic, and histological diagnosis of sebaceous nevus in different age periods are described. In adults (third stage), the most important histological signs are hyperplastic sebaceous glands without excretory ducts, underdevelopment of hair follicles, dermal papillomatosis, and acanthosis of the epidermis. Dermatoscopy shows yellow, white, and/or orange globules, the size of which increases with age; also, light or dark yellow structureless areas may appear. We present three cases demonstrating the possibility of the occurrence of basal cell skin carcinoma in subjects over 40 years of age with a congenital sebaceous nevus.