A skin cyst can be reduced by using a hot water compress (as hot as you can tolerate) applied to the area where the cyst is located. This breaks down the walls of the cyst and allows the fluids within to migrate back to the body tissues where they belong.
Cysts are often mistaken for boils and inflammations, which can be alleviated with compresses, etc. However, a true cyst should be seen by a doctor and removed surgically.
The treatment of cyst depends on where it is located. Some of them may be rarely treated by punctuation, and the others are often treated with surgery. After the surgery the cyst should be examined under microscope to rule out cancers.
It is best if one has a cyst that needs treatment to receive that treatment from a physician. There are too many chances of complications with self treatment.