Proliferating pilar tumors are rare neoplasms that differentiate toward the outer sheath near the isthmus and can rarely undergo malignant transformation. We performed histopathologic evaluation on 26 benign proliferating pilar tumor (BPPT) and 17 malignant proliferating pilar tumor (MPPT). Ki-67 and p53 immunostains were performed on 13 BPPT and 10 MPPT. Six MPPT cases were successfully analyzed by a next-generation sequencing platform which surveyed exonic DNA sequences of 447 cancer genes and 191 regions across 60 genes for rearrangement detection. Patient demographics and clinical characteristics were similar between the BPPT and MPPT groups. Follow-up data of 16 of 17 MPPT (median, 25 mo) showed metastasis in 1 MPPT. The histologic features associated with MPPT include size >2.5 cm, adjacent desmoplastic stroma, small nests or cords of atypical epithelium in surrounding stroma, irregular infiltration or borders, abnormal keratinization, large hyperchromatic nuclei, prominent nucleoli, severe cytologic atypia, nuclear pleomorphism, necrosis, and increased mitotic figures. MPPT harbors copy number gains of 15q and losses of 6p and 6q, findings previously reported in BPPT. However, MPPT harbors frequent TP53 mutations as molecular markers of progression. Different from cutaneous squamous cell carcinoma, MPPT more frequently demonstrates low tumor mutational burden and typically lacks a UV signature, suggestive of a different etiologic pathway than squamous cell carcinoma. In summary, with a median follow-up of 25 months, this study shows that MPPT is a biologically indolent carcinoma with rare metastasis. Molecular analyses suggest a non–UV-related pathogenesis with frequent TP53 aberration.