Background: Cystic lesions are common in the daily practice of dermatologists and dermatopathologists, and in most cases, a straightforward diagnosis can be done. Yet, some variants and situations may cause diagnostic problems or carry prognostic and/or systemic implications. Objective: To review the histopathological features of the most frequent cystic lesions, either true cysts or pseudocysts, and provide some clues and pitfalls to bear in mind for troublesome situations such as solid–cystic tumors; uncommon variants; incidental findings; artifactual, reactive, or infectious cavities; cysts as a warning of systemic and hereditary diseases; and malignant cystic tumors, either primary or metastatic. Methods: The histopathological diagnostic criteria of most cystic lesions and their potential caveats will be discussed, offering some diagnostic clues. Results: Cystic lesions of the skin can primarily be classified into true cysts and pseudocysts. The most frequent pseudocysts are sinus pilonidalis and mucin-filled cavities. True cysts can be divided according to their epithelial origin or differentiation into epidermal/pilar cysts, cysts from glandular appendages, and from embryonic remnants. Diagnostic dilemmas and possible pitfalls in cystic lesions are reviewed, offering some keys to solve them. Conclusions: Knowledge of the histopathology of cystic lesions contributes to their correct diagnosis, improving the management of patients.