Antimalarials are usually recommended for the first-line systemic treatment of cutaneous lupus erythematosus. Alopecia in patients with discoid lupus erythematosus (DLE) is sometimes a refractory condition in spite of topical therapies. We herein described a case of DLE on the scalp with a pathological change of a xanthomatous reaction, which was successfully treated with hydroxychloroquine (HCQ). A 34-year-old woman presented with hair loss to the parietal region. She had been diagnosed with systemic lupus erythematosus (SLE) four years previously. Treatment with 30 mg/day of prednisolone (PSL) had been initiated, and the dose was gradually reduced. At 10 mg/day of PSL, she had noticed her hair loss. Physical examination revealed some small erythematous lesions to the parietal region with accompanying hair loss. Pathological findings of the erythematous lesion on her head revealed thickening of the basement membrane zone, the interface dermatitis with vacuolar degeneration, and both superficial perivascular and perifollicular infiltration of inflammatory cells in the dermis. In addition, there was an infiltrate of xanthomatous cells detected in the papillary dermis, which were positive for CD68 and CD163. The patient started treatment with HCQ at a dose of 200 mg/day. The skin lesions completely resolved within five months after initiation of HCQ without increase in the dose of PSL. Xanthomatous reactions are rarely recognized in lupus erythematosus. The chronic epithelial injury in DLE could be implicated in triggering the secondary reactive process of a xanthomatous reaction. We believe that the reaction seen in our patient was a secondary change to pathological alteration due to SLE. However, as yet unrecognized factors may play a role in the development of a xanthomatous reaction in DLE.