Liposarcomas are rare malignant tumors of the adipose tissue which are well described in humans and animals. Wide margin excision is the recommended treatment for these infiltrative, slow to metastasize tumors. Primary liposarcoma with ocular localization is a very rare tumor in humans, dogs and cats. This report describes, for the first time, a palpebral liposarcoma in a 18-month old guinea pig that presented with a large palpebral mass and purulent discharge in the right eye. The ophthalmic evaluation revealed a one-centimeter infiltrating subcutaneous mass within the upper eyelid, a severe chemosis and hyperhemia of the palpebral and bulbar conjunctiva of the right eye. Cytologic examination of the mass revealed only epithelial cells. Histologic examination interpreted the lesion as a xanthogranulomatous reaction possibly secondary to meibomian gland rupture or inflammation. One month later, the mass had increased in size and the animal had stopped eating. Euthanasia was perfomed and a large biopsy was submitted for another histological examination. Histopathology revealed polygonal to rounded cells with a large, empty intracytoplasmic vacuole, and an ovoid, eccentrically located nucleus. The histology was consistent with a well-differentiated liposarcoma. Given the unusual location, immunohistochemistry was performed to ascertain the mesenchymal nature of the neoplasm.