Two men, aged in their 20s, presented with multiple, soft, rounded papules on the prepuce. The lesions were centrally umbilicated, resembling molluscum contagiosum, but clearly distinct from Tyson’s glands. Surface microscopy showed well-defined, milky-white, bag-shaped structures, which under histological examination were found to be sebaceous glands with various features of hyperplasia. A lymphocytic T-cell infiltrate, closely associated with progressive degeneration and destruction of the sebocytes, was visible around the glands. In the differential diagnosis of penile papular lesions, this unusual clinical presentation supported by dermatoscopy is consistent with preputial sebaceous gland hyperplasia. As both patients had a prominent T-cell infiltration, it is possible that under inflammatory stimulation, sebaceous glands undergo hypertrophy and gradual central involution.