OBJECTIVE To investigate the frequency, epidemiology, clinical features, and prognostic significance of inflamed molluscum contagiosum (MC) lesions, molluscum dermatitis, reactive papular eruptions resembling Gianotti-Crosti syndrome, and atopic dermatitis in patients with MC. DESIGN Retrospective medical chart review. SETTING University-based pediatric dermatology practice. PATIENTS A total of 696 patients (mean age, 5.5 years) with molluscum. MAIN OUTCOME MEASURES Frequencies, characteristics, and associated features of inflammatory reactions to MC in patients with and without atopic dermatitis. RESULTS Molluscum dermatitis, inflamed MC lesions, and Gianotti-Crosti syndrome-like reactions (GCLRs) occurred in 270 (38.8%), 155 (22.3%), and 34 (4.9%) of the patients, respectively. A total of 259 patients (37.2%) had a history of atopic dermatitis. Individuals with atopic dermatitis had higher numbers of MC lesions (P < .001) and an increased likelihood of molluscum dermatitis (50.6% vs 31.8%; P < .001). In patients with molluscum dermatitis, numbers of MC lesions increased during the next 3 months in 23.4% of those treated with a topical corticosteroid and 33.3% of those not treated with a topical corticosteroid, compared with 16.8% of patients without dermatitis. Patients with inflamed MC lesions were less likely to have an increased number of MC lesions over the next 3 months than patients without inflamed MC lesions or dermatitis (5.2% vs 18.4%; P < .03). The GCLRs were associated with inflamed MC lesion (P < .001), favored the elbows and knees, tended to be pruritic, and often heralded resolution of MC. Two patients developed unilateral laterothoracic exanthem-like eruptions. CONCLUSIONS Inflammatory reactions to MC, including the previously underrecognized GCLR, are common. Treatment of molluscum dermatitis can reduce spread of MC via autoinoculation from scratching, whereas inflamed MC lesions and GCLRs reflect cell-mediated immune responses that may lead to viral clearance.