Virilizing ovarian dermoid cysts are very rare. The source of androgen in these cysts may be tumors such as Sertoli-Leydig cell tumor or Leydig cell hyperplasia. A 52-year-old postmenopausal female with virilization was found to have an ovarian dermoid cyst on ultrasound. Her serum testosterone levels were elevated. Leydig cell hyperplasia within the dermoid cyst was found to be the source of androgen in this patient.