Sebaceous adenoma is a rare solitary or multiple yellow, circumscribed neoplasm consisting of sharply demarcated, proliferating lobules or irregular size and shape that are composed of three cell bypes: basal cells, mature and transitional sebaceous cells. We reported a case of extremely rare sebaceous adenoma arising in caruncle of the left eye in a 78-year-old female. A polypoid tumor nodule, measuring 0.6x0.5 cm, was noticed 6 months before resection. It was grayish white with granular surface. There is no evidence of associated visceral neoplasm. Histopathologically, it revealed a lobulated tumor, composed of equal amount of highly differentiated sebaceous and intermediate transitional epithelium with minor participation of basaloid cells. This tumor is thought to be the neoplasm of the sebaceous gland normaly present in the caruncle of the eye rather than ectopic origin.