A man in his late 70s with a history of psoriasis and non-melanoma skin cancer presented with a progressive rash on his right thenar eminence. He first noticed it about one year ago. He denied any pruritus in the affected region but did note some overlying skin breakdown. He had used topical betamethasone and calcipotriene cream in the past with minimal improvement. Physical examination revealed a pink atrophic plaque with linear hyperkeratotic borders and central fissuring on the right thenar eminence extending into the first webspace. A shave biopsy revealed hypokeratosis with a rim of surrounding hyperkeratosis and associated parakeratosis, basal keratinocyte atypia, and lichenoid inflammation. These histopathological features were consistent with circumscribed palmar hypokeratosis and central actinic keratosis. Circumscribed palmar hypokeratosis is often considered a benign entity, but there have been reports suggesting an association with premalignancy. The decision was made to treat with 5-fluorouracil and calcipotriene cream twice daily for six weeks. At his two-month follow-up, he endorsed a robust reaction, which was further suggestive of premalignant change. He had a near-complete resolution of the rash. This case features circumscribed palmar hypokeratosis and suggests a novel treatment option for patients who develop concomitant actinic keratosis.