Peutz-Jeghers syndrome is characterized by multiple polyps throughout the gastrointestinal tract in association with mucocutaneous pigmentation. Small bowel polyps in the syndrome may exhibit epithelial misplacement, into the submucosa, the muscularis propria, and even the subserosa. The authors demonstrate two patients in whom there is also misplacement of dysplastic epithelium into the submucosa and muscularis propria of the small bowel. Epithelial misplacement is recognized to mimic invasive malignancy. Such mimicry is heightened substantially when the misplaced epithelium is dysplastic. Correct interpretation of the histologic changes is aided by the use of special stains, which demonstrate the associated lamina propria and the lack of a desmoplastic response, and immunohistochemistry, which shows that the misplaced dysplastic epithelium is accompanied by non-neoplastic mucosa. There is an increased prevalence of gastrointestinal malignancy in Peutz-Jeghers syndrome. However, the presence of perplexing histologic features, caused by epithelial misplacement, especially when some of that epithelium is dysplastic, in small bowel polyps at least has the potential for the overdiagnosis of malignancy in the syndrome.