We report a rare presentation of lipofibromatous hamartoma involving the superficial peroneal nerve with significant macrodactyly in a woman in her late 40s, with a follow-up period of 3 years. We discuss the clinical presentation, distinguishing features, and the surgical technique chosen for maximum functional outcome, along with a review of the literature. This case report attempts to understand the spectrum of disease represented by lipofibromatous hamartoma, its nomenclature, diagnosis, and management depending on the extent of tissue involvement. In this case, as there was macrodystrophia with osseous overgrowth and extensive lipomatosis, the challenges involved in planning surgery for a desirable aesthetic and mechanical outcome have been discussed.