Background: Lipomas are benign tumor, mostly seen in the trunk, nape of the neck, shoulder and upper arm, unusually located in forearm and hands. Lipoma in the forearm may of either in the neural plane or outside the neural plane. Within the neural plane it may be either intra-neural or peri-neural lipoma. Intra-neural lipomas  arising from the peripheral nerves are very rare. Case Report: We hereby report intra-neural lipoma with cartilagenous metaplasia of median nerve in distal forearm presenting with carpal tunnel syndrome (CTS) in young female. Conclusion: This case is being reported because of its rare and atypical presentation.