An epidermal cyst is a common slow-growing bump due to an enlarging sac under the skin that accumulates a cheesy substance composed of skin secretions.
Epidermal cysts, often incorrectly referred to as sebaceous cysts, are flesh-colored and range from ½ to 2 inches (about 1 to 5 centimeters) across. They often have an enlarged pore overlying them. They can appear anywhere but are most common on the back, head, and neck. They tend to be firm and easy to move within the skin. Epidermal cysts are not painful unless they become infected or inflamed.
Large epidermal cysts are removed surgically after an anesthetic is injected to numb the area. The thin sac wall must be removed completely or the cyst will grow back. Cysts that have burst under the skin often cause tenderness and swelling and need to be cut open to drain. Tiny cysts that are bothersome can be lanced and drained.
Resource: Merck Manual Home Edition