Malignant transformation of mature cystic teratoma (MCT) is a well-known but uncommon phenomenon seen mostly in postmenopause women. We report a case of a 65-year-old postmenopausal woman with a malignant transformation of MCT and with a low-grade squamous intraepithelial lesion in her cervix. She was treated surgically by total abdominal hysterectomy with bilateral salpingo-oophorectomy with a preoperative diagnosis of right ovarian teratoma. Her postoperative period was uneventful. On follow-up, the histopathology report revealed a right ovarian dermoid cyst with well-differentiated squamous cell carcinoma; there was no evidence of malignancy elsewhere, including the cervix. Ascitic fluid was also free of malignant cells, and the disease was at stage Ia. The patient did not receive any adjuvant chemotherapy and was followed up with clinical examination postoperatively for 1 year, and there was no evidence of any relapse clinically. Preoperative diagnosis of malignant transformation of squamous cell carcinoma (SCC) is difficult, as there is no specific screening marker and no consensus or standard guidelines available regarding the optimum management of this relatively poorly known entity. Here we emphasize the need for a high index of suspicion of malignant transformation with the presence of factors such as elderly age, the huge size of the tumor, and large solid components in the tumor. Considering the scarcity of case reports and studies about SCC arising from MCT, every experience with malignant transformation of MCT should be reported for a better understanding of the disease presentation and management.