Inverted papilloma is an uncommon lesion which occurs in the mucous membrane of the nasal cavity and paranasal sinuses. It is a tumor in which there is inversion of the neoplastic epithelium into the underlying stroma rather than proliferating outwards. It arises from respiratory epithelium. Inverted papilloma has long been known for unusual, some what malignant behavior. The high rates of recurrence and transformation to carcinoma justify classifying this tumor as premalignant. The authors reviewed 19 cases of inverted papilloma and studied 2 cases of malignant transformation from 1983 to 1992 treated in our institute. Two patients(11%) were found to have squamous cell carcinoma in relations with the inverted papilloma or nasal polyps. The clinical presentation, treatment and outcome of inverted papillomas and squamous cell carcinomas in association with inverted papillomas are discussed.