Lipofibromatous hamartoma (LFH) is a rare benign peripheral nerve tumor. The median nerve (MN) is most commonly affected in the upper extremity. We report a case of a 39-year-old male with LFH of the median nerve presented with swelling and symptoms of carpal tunnel syndrome treated successfully with decompression. LFH is reported with various descriptions because of the proliferative nature of its adipocytes and the fibrofatty infiltration within the peripheral nerves. Swelling around the volar aspect of the wrist remains the most frequent presentation of LFH. Surgical decompression without tumor resection can result in symptom improvement. In addition, post-decompression nerve coverage can be a solution to improve the residual hyperesthesia symptoms.