Sebaceous, or oil-producing, glands sometimes become plugged with gland material and other debris, which can lead to a bacterial infection; it is similar to the development of acne. Sebaceous cysts are not terribly serious, although if large enough they may cause pain from the pressure. Sometimes they can be treated conservatively by opening the cyst and treating the secondary infection. Warm soaks or hot packs followed by firm pressure may allow the cyst to open. The material inside can then be squeezed out daily. If, at the same time, your dog could be put on an inexpensive oral antibiotic, you may be able to avoid the need for surgery.
Large cysts that refill repeatedly can be successfully removed. This is especially important for outdoor dogs, whose draining cysts may attract flies. If you opt for removal, your veterinarian can lance the cyst using only a local anesthetic or can do a more extensive excision using general anesthesia.