Lipoma, though one of the most common benign mesenchymal neoplasms, its presentation in hand is very rare. It can be located in various planes. Intramuscular lipomas are uncommon and usually occur in the proximal muscles of the extremities. Intramuscular lipoma of hand is extremely rare and only very few cases have been reported in the literature. Lipomas of hand may present with neurovascular deficit due to compression. We present here an unusual case of intramuscular lipoma of thenar region with no neurovascular deficit which was surgically excised under local anaesthesia with good cosmetic and functional outcome.