There is controversy in the veterinary literature over the importance – and even the definition – of hydropic degeneration of epidermal basal cells. We performed a retrospective histopathological study on the prevalence of hydropic degeneration of epidermal basal cells (strictly defined) in skin-biopsy specimens from 299 horses with various inflammatory dermatoses and 27 horses with normal skin. Hydropic degeneration of epidermal basal cells was significantly associated with a small group of immune-mediated dermatoses characterized by an interface dermatitis histopathological reaction pattern: adverse cutaneous drug reaction, discoid lupus erythematosus, erythema multiforme, and systemic lupus erythematosus.