Although the prevalence of steatocystoma multiplex is unknown, it appears to be rare.

Steatocystoma multiplex can be caused by mutations in the KRT17 gene. This gene provides instructions for making a protein called keratin 17, which is produced in the nails, the hair follicles, and the skin on the palms of the hands and soles of the feet. It is also found in the skin's sebaceous glands. Keratin 17 partners with a similar protein called keratin 6b to form networks that provide strength and resilience to the skin, nails, and other tissues.

The KRT17 gene mutations that cause steatocystoma multiplex alter the structure of keratin 17, preventing it from forming strong, stable networks within cells. The defective keratin network disrupts the growth and function of cells in the skin and nails, including cells that make up the sebaceous glands. These abnormalities lead to the growth of sebum-containing cysts in people with steatocystoma multiplex. However, it is unclear why steatocystomas are typically the only feature of this disorder.

Many researchers believe that steatocystoma multiplex is a variant form of a disorder called pachyonychia congenita, which can also result from mutations in the KRT17 gene. Like steatocystoma multiplex, pachyonychia congenita involves the growth of steatocystomas. Pachyonychia congenita is also associated with more severe nail abnormalities and a painful skin condition called palmoplantar keratoderma, which are not usually found in people with steatocystoma multiplex.

In some cases, people with steatocystoma multiplex do not have an identified mutation in the KRT17 gene. The cause of the condition in these individuals is unknown.