Aims: Osteoblastoma is a rare bone tumour and differentiation from osteosarcoma is occasionally a diagnostic problem. The difficulty is further compounded when such a lesion microscopically shows cytological or architectural atypia. Methods and results: A case of pseudomalignant osteoblastoma occurring in the left iliac crest of a 34‐year‐old Chinese woman is presented. Radiographic findings were non‐diagnostic, but favoured a benign yet locally aggressive lesion. Histologically the diagnosis was based on the findings of classical osteoblastoma areas harbouring pseudomalignant osteoblasts in the absence of mitoses, but there were co‐existing atypical architectural features also. Conclusion: The significance and pathogenesis of the ‘permeative pattern’ are discussed. Difficulties in differentiating borderline lesions are emphasized.