A 5-year-old neutered male domestic shorthair cat was presented for examination of a subcutaneous mass in his tail. The mass was firm, non-painful, oval, and approximately 2.5 × 3.5 cm. Surgical exploration revealed a well-circumscribed, encapsulated mass. The mass was removed and sectioned for histopathological examination. In gross section, it was filled with numerous dark hairs. Histologically the mass was consisted of haired skin with dermal cystic structures lined by stratified squamous epithelium. The cyst lumen contained squamous debris and filled with keratinous material. Numerous hair shafts were extended from the wall of the cyst. The sebaceous and apocrine gland adnexal structures were also observed which confirmed the diagnosis of dermoid cyst. No tumor recurrence was observed after surgery in fallowing checkups. Cutaneous or subcutaneous cysts of all types are considered rare in cats and to our knowledge this is the third reported case of cutaneous dermoid cyst of cats in veterinary literature which is different from the other cases because it occurred in dorsal midline in tail area whereas others occurred in flank area.