Schwannomas constitute only 5% of tumors of upper limb. Schwannoma of the posterior interosseous nerve is rare. A thorough search of literature revealed only three case reports of this entity. A 33-year old female presented with insidious onset swelling over extensor aspect of right forearm for one year and deficit of extension of fourth and fifth finger for a month. Magnetic Resonance Imaging and Fine Needle Aspiration Cytology were suggestive of low- grade nerve sheath tumor. The tumor was excised under tourniquet control and magnification, using microsurgical technique. Histopathology confirmed schwannoma. Result. Patient regained her full extension of fourth and fifth finger within 1.5 months. As schwannoma does not infiltrate the nerve fibers, so a complete surgical excision is the treatment of choice. We wrote this article to draw clinicians' attention to this unusual entity. Schwannoma of PIN is a relatively rare condition. Till date, there are only three cases reported in literature. Meticulous attention to detail is required while excising large schwannomas, as there is a risk of fascicular injury during dissection. Use of magnification and microsurgical technique prevents inadvertent nerve injury.