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Though there is abundant fat in bone narrow but very few lipomas involving the bone are described, perhaps less than 10 are reported in the world literature. Bartlett (1930) reported 2 cases of sub-periosteal lipoma, one arising from the humerus and the other from the tibia. Lewis (1939), Dickson (1951) and Child (1955) reported one case each involving ulna, tibia and os-calcis respectively. The case described here is an unusual type of periosteal lipoma arising from femur.