We describe a case of a Merkel cell tumor of the eyelid that manifested as a recurrent chalazion. This tumor had the classic characteristics of a Merkel cell neoplasm by light microscopy. Electron microscopy showed dense-core neurosecretory granules and perinuclear microfilaments consistent with the diagnosis. Because a Merkel cell tumor may manifest as a chalazion, pathologic evaluation of all atypical chalazia is essential. Merkel cell tumors are malignant, and they must be treated aggressively to minimize recurrence or metastasis.