They can: Two types of cysts commonly occur underneath the skin, epidermoid cysts and sebaceous cysts. Both usually appear as flesh-colored or whitish-yellow smooth-surfaced lumps. Epidermoid cysts form when surface skin cells move deeper into the skin and multiply. These cells form the wall of the cyst and secrete a soft, yellowish substance called keratin, which fills the cyst. Sebaceous cysts form inside.
Answered 9/6/2013
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