Benign mature cystic teratoma is being seen through all ages of a women’s age. It has varied presentations. Malignant transformation in teratoma though rare is usually seen in postmenopausal women. Malignant transformation is usually detected postoperatively in the histopathology. We are reporting a case in which a postmenopausal lady was operated and squamous cell carcinoma in a dermoid cyst was detected postoperatively. Certain signs on the imaging can help to diagnose this in the preoperative period so that the proper counselling and treatment can be given to the patient.