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Melanocytic schwannoma (MS) is an extremely rare soft tissue tumor accounting for less than 1% of all primitive nerve sheath tumors, with a predilection for spinal nerve involvement. To date, only 20 cases of cutaneous/subcutaneous MS have been described in literature. Here, we describe a case of MS presenting as a subcutaneous nodule in a 22-year-old male in right thigh. On examination, the nodule measured 2.5 x 2.0 x 1.5 cm with overlying skin showing a bluish hue and an ulcer. With a preoperative diagnosis of hemangioma, the patient was taken up for wide local excision and was diagnosed as a case of non psammomatous melanocytic schwannoma based on clinical, histological, and immunohistochemical studies. Immunohistochemistry revealed positivity with S-100, HMB-45, and Melan A with pericellular Laminin positivity. Carney's syndrome was ruled out. MS needs to be differentiated from other pigmented lesions like pigmented neurofibroma, Bednar tumor, cellular blue neavus, and especially malignant melanoma, which has an obvious ominous prognosis. Since MS can show unpredictable behavior especially in absence of overt malignant features, a long term follow up with or without radiotherapy is recommended. [ABSTRACT FROM AUTHOR]