This study assessed whether analysis of MDM2 copy number by fluorescence in situ hybridization (FISH) would help distinguish lipomas from atypical lipomatous tumors, otherwise referred to as well-differentiated liposarcomas, using a commercially available MDM2 FISH kit. 227 lipomatous and 201 non-lipomatous tumors were analyzed to assess its sensitivity and specificity. Of 178 mature lipomatous tumors, 86 were classified histologically as lipoma and 92 as atypical lipomatous tumor. Two of the lipomas harboring MDM2 amplification were reclassified as atypical lipomatous tumors. Overall, 13 atypical lipomatous tumors did not reveal MDM2 or CDK4 amplification, although this was reduced to 12 following analysis of multiple slides. Three of these cases revealed very occasional tumor cells harboring high-level MDM2 amplification, two had a dedifferentiated component, and MDM2 amplification was detected when one tumor recurred. The remaining six cases exhibited reactive/inflammatory features and were reclassified as lipomas. The findings indicate that MDM2 amplification is 93.5% sensitive for diagnosing atypical lipomatous tumor. A total of 2 of the 20 dedifferentiated liposarcomas failed to reveal MDM2 amplification. All atypical lipomatous tumors measured 410 cm, two dedifferentiated liposarcoma presented de novo at o10 cm, and B50% of lipomas measured 410 cm. Spindle cell lipomas, lipoblastomas, hibernomas and pleomorphic liposarcomas did not reveal MDM2 amplification. Of 201 nonlipomatous tumors, eight revealed MDM2 amplification or multiple faint alphoid 12 signals and were reclassified as dedifferentiated liposarcoma. Multiple faint alphoid 12 signals were observed in nine tumors from seven patients, an observation not previously reported on paraffin sections: these included four atypical lipomatous tumors, and three dedifferentiated liposarcomas, one previously diagnosed as a myxofibrosarcoma, all of which also revealed amplification of CDK4, although two lacked MDM2 amplification. MDM2 FISH test is a useful adjunct to histology for distinguishing lipoma from atypical lipomatous tumor. The limitations of molecular genetic tests must be known before introducing them into a clinical service.