Tumors arising from or located within a peripheral nerve are not common and recognition and treatment are difficult. We report a patient with a myxoid swannoma surrounding the axon of ulnar nerve. This 50-year old woman had pain and tenderness. Careful clinical and technical investigation--including CT and angiography--could not give a definite diagnosis preoperatively. The patient was cured by simple enucleation without damage to the axon bundles. At surgery the appearance of the tumor was typical. An oval, encapsulated mass measuring up to 5.5 by 9 centimeters in diameter was seen. Only biopsy and pathologic examination can exclude malignancy. After follow-up of 48 months no local recurrence of the tumor was found.