A 36 year old male presented with a two-month history of a progressively increasing proptosis of the right eye associated with redness. MRI of brain and orbit revealed a mass in the intraconal compartment in the lateral aspect of the right orbit that had T1, T2, and FLAIR high signal intensity and was completely suppressed in the STIR image. Excisional biopsy of the mass resolved the proptosis, and histology revealed encapsulated tumor composed of lobules of mature adipocytes along with fibro collagenous septa. Thus, diagnosis of lipoma was established that has uncommon occurrence in the orbital region.