Lipophagic panniculitis of childhood is a rare condition notable clinically for an inflammatory panniculitis followed by the development of permanent lipoatrophy. In this regard, the term lipoatrophic panniculitis has been used synonymously with lipophagic panniculitis. Additional designations include lipophagic lipoatrophic panniculitis and annular lipoatrophic panniculitis of the ankles. Although lipophagic panniculitis has been associated with a number of autoimmune phenomena, a paucity of reports and limited pathological analyses to date renders this disease an elusive one whose pathogenesis is not yet established. We describe the clinical, histopathologic, and immunohistochemical findings in a case of lipophagic panniculitis of childhood in a 7-year-old boy and present it in the context of a comprehensive review of the literature. Furthermore, we offer a hypothesis regarding the pathogenetic basis of lipophagic panniculitis of childhood, suggesting cellular immunity targeting the adipocyte at the crux of its pathogenesis.