Intraosseous schwannomas or neurilemomas are rare benign neoplasms that account for less than 0.2% of primary bone tumours. Very rarely they have been observed in lumbar vertebrae. We report a neurilemoma involving the lower thoracic spine and present the clinical, radiological and histological findings with surgical management and 5-year follow-up. An 18-year-old-male presented with back pain and deteriorating locomotor function. Neurological examination revealed wasting of both calves and weakness in plantar flexion and dorsiflexion bilaterally. X-rays showed a D12 vertebral body abnormality with cystic changes and collapse of the body and pedicle. MRI showed a tumor occupying the D12 vertebrae with perivertibral protrusion compressing the thecal sac. Surgical decompression, excision and stabilisation with an extendable cage, bone graft and anterior rod system were achieved through a thoracolumbar approach. Histology results confirmed an intraosseous schwannoma with no remnants of an originating nerve. These tumors are rare but can be successfully treated with surgical excision and maintenance of spinal stability with recovery of neurological and functional change. Recurrence is uncommon.