Ninety-two cases of well-differentiated liposarcoma of deep soft tissue of the extremity, retroperitoneum, and groin with follow-up information of at least 2 years and no evidence of dedifferentiation at the time of diagnosis were studied to determine their long-term behavior. The tumors occurred most commonly in the muscles of the extremity (46 cases), followed by the retroperitoneum (23 cases), groin (14 cases), and miscellaneous sites (nine cases). Tumors in the retroperitoneum recurred in nearly all cases (21 of 23 cases), occasionally caused patient death, and dedifferentiated in four cases (median time to dedifferentiation, 8 years). Tumors in the groin had a similar high recurrence rate (11 of 14 cases), caused death of patients (two of 14 cases), and dedifferentiated (four of 14 cases). In contrast, those in the extremity recurred less frequently (20 of 46 cases) and had no disease-related mortality. Three of 46, however, underwent dedifferentiation (median time to dedifferentiation, 7 years). Of the 11 cases that underwent dedifferentiation, the interval between diagnosis and dedifferentiation ranged from 2 to 18 years (median time, 9 years; average time, 11 years). Six of the 11 patients showed dedifferentiated foci in the first recurrence, and three died of metastatic disease. Our study indicates that the behavior of well-differentiated liposarcomas is strongly influenced by location. Although the prevailing view is that dedifferentiation is restricted to tumors of the retroperitoneum, our study indicates that it is not a site-specific phenomenon, but is more likely a time-dependent phenomenon seen in situations with a high likelihood for clinical persistence of disease for a long period. Dedifferentiation identifies a tumor that is potentially more aggressive; yet the progression of the disease following dedifferentiation may be highly variable and probably depends on a number of factors, including the amount of dedifferentiation and type of therapy. Although atypical lipoma is an acceptable term for well-differentiated liposarcomas of the subcutis, it fails to convey the potentially life-threatening properties of retroperitoneal tumors. For these lesions as well as those in the deep soft tissues of the extremity, retention of the term well-differentiated liposarcoma is advocated.