Atypical spindle cell/pleomorphic lipomatous tumor (ASCPLT) is a rare and recently described adipocytic neoplasm that primarily occurs in the subcutis of the limbs and limb girdles, particularly of middle-aged adults. It has locally recurrent potential if incompletely excised but no risk for distant metastasis. ASCPLT is histologically similar to spindle cell/pleomorphic lipoma and atypical lipomatous tumor and shows a mixture of atypical spindle cells, adipocytes, lipoblasts, floret-like multinucleated giant cells, and/or pleomorphic cells. It has been recently recognized that ASCPLT can undergo sarcomatous transformation. However, the biological significance of morphological sarcomatous transformation in ASCPLT remains uncertain. Immunohistochemically, the tumor cells show variable expression of CD34, S-100 protein, and desmin. Loss of nuclear Rb expression is observed in the majority of cases. ASCPLT lacks MDM2 gene amplification but can show RB1 gene deletion in a significant subset of cases. Complete surgical excision is the treatment of choice. This review provides an overview of the current knowledge on the clinicoradiological features, pathogenesis, histopathology, and treatment of ASCPLT. In addition, we will discuss the differential diagnosis of this new entity.