We report a case of intraepidermal Merkel cell carcinoma which occurred on the face of a 76-year-old white male. This slow-growing tumor was mostly confined in the epidermis and pilosebaceous apparatus where tumor cells spread in a pagetoid fashion forming tumor cell nests. Histologically it resembled a superficial spreading melanoma. A heavy lymphocytic infiltration was seen beneath the epidermal lesion as is often seen in pagetoid melanomas. Histochemical and ultrastructural features such as the presence of cytokeratin 20, synaptophysin, neuron specific enolase, desmosomes, and dense cored granules confirmed the diagnosis of Merkel cell carcinoma. Occasional mitotic cells and many apoptotic cells were found in the tumor. Dylon positive, amyloid depositions were seen in the lower epidermis and papillary dermis; they were probably derived from apoptotic tumor cells. It was thought that apoptosis limited the speed of growth of this tumor. We believe that this is probably the most convincing case of intraepidermal Merkel cell carcinoma originating from epidermal Merkel cells or its precursors (stem cells).