Schwannoma affect mainly head, neck, and flexor aspect of the limbs. Neurogenic tumors arising from the brachial plexus are rare and axillary schwannoma is extremely uncommon. Cystic degeneration is common in longstanding cases and which when aspirated may yield only macrophages or lymphocytes leading to false diagnosis of the case in spite of strong clinical suspicion. We report one such rare case of a solitary axillary schwannoma with extensive cystic degeneration, which was misdiagnosed on fine needle aspiration cytology and subsequently confirmed by the histopathological examination and immunohistochemistry.