Cholesteatoma is a destructive and expanding growth consisting of keratinizing squamous epithelium in the middle ear and/or mastoid process. Cholesteatomas are not cancerous as the name may suggest, but can cause significant problems because of their erosive and expansile properties. This can result in the destruction of the bones of the middle ear (ossicles), as well as growth through the base of the skull into the brain. They often become infected and can result in chronically draining ears. Treatment almost always consists of surgical removal.

Other more common conditions (e.g. otitis externa) may also present with these symptoms, but cholesteatoma is much more serious and should not be overlooked. If a patient presents to a doctor with ear discharge and hearing loss, the doctor should consider cholesteatoma until the disease is definitely excluded. Other less common symptoms (all less than 15%) of cholesteatoma may include pain, balance disruption, tinnitus, earache, headaches and bleeding from the ear. There can also be facial nerve weakness. Balance symptoms in the presence of a cholesteatoma raise the possibility that the cholesteatoma is eroding the balance organs in the inner ear.

Doctors' initial inspections may only reveal an ear canal full of discharge. Until the doctor has cleaned the ear and inspected the entire tympanic membrane, cholesteatoma cannot be diagnosed. Once the debris is cleared, cholesteatoma can give rise to a number of appearances. If there is significant inflammation, the tympanic membrane may be partially obscured by an aural polyp. If there is less inflammation, the cholesteatoma may present the appearance of 'semolina' discharging from a defect in the tympanic membrane. The posterior and superior parts of the tympanic membrane are most commonly affected. If the cholesteatoma has been dry, the cholesteatoma may present the appearance of 'wax over the attic'. The attic is just above the eardrum.

If untreated, a cholesteatoma can eat or cause erosion of the three small bones located in the middle ear (the malleus, incus and stapes, collectively called ossicles). This can result in nerve deterioration, imbalance, vertigo, and deafness early in the disease. It can also affect and erode, through the enzymes it produces, the thin bone structure that isolates the top of the ear from the brain, as well as lay the covering of the brain open to infection with serious complications (rarely even death due to brain abscess and sepsis).

Both the acquired as well as the congenital types of the disease can affect the facial nerve that extends from the brain to the face and passes through the inner and middle ear and leaves at the anterior tip of the mastoid bone, and then rises to the front of the ear and extends into the upper and lower face.

Cholesteatomas occur in two basic classifications: Acquired cholesteatomas, which are more common, are usually caused by pathological alteration of the ear drum leading to accumulation of keratin within the middle ear. Congenital cholesteatomas are usually middle ear epidermal cysts that are identified deep within an intact ear drum often in the superior anterior portion.

Cholesteatomas do not contain cholesterol or fat and should not be confused with cholesterol granulomas.

Keratin-filled cysts that grow medial to the tympanic membrane are considered to be congenital if they fulfill the following criteria (Levenson's criteria):