Basaloid follicular hamartoma is a benign lesion of important consideration because it can be mistaken both clinically and histologically for basal cell carcinoma. The formation of basaloid follicular hamartoma has been linked to a mutation in the patched gene, which is part of the same pathway implicated in nevoid basal cell carcinoma syndrome. While these hamartomas are considered benign lesions, malignant growths have been reported to arise within them, which raises the question, "Is basaloid follicular hamartoma a premalignant lesion?" Correct identification allows for periodic monitoring for malignant transformation, while sparing patients unnecessary surgery. Treatment strategies, including experimental therapies, are reviewed.