Nerve sheath myxoma is a rare benign tumor of the peripheral nerves. It typically presents as a painless, firm, and slow growing nodule with a predilection for extremities mostly fingers and knees. Microscopically, it has characteristic multilobules of spindle cells in an abundant myxoid stroma. The cells are strongly positive for S-100 protein. However, this rare tumor is usually misdiagnosed as other more common benign neuronal tumors. This report describes a rare case of nerve sheath myxoma involving the palmar surface of a 23-year-old female. Clinically, it was diagnosed as a fibroma. It was excised and the final diagnosis was made after histopathological and comprehensive immunohistochemical examination of the specimen. The clinicopathological features of this rare tumor and its important differential diagnoses are discussed along with a brief review of the literature.