We describe a 64-year-old man with past chronic myeloid leukemia. Palisading neutrophilic granulomatous dermatitis of the hands was diagnosed and related to recent allopurinol intake. Allopurinol is known to rarely cause granulomatous reactions, but this appears to be the first case of palisading neutrophilic granulomatous dermatitis induction. Possible mechanisms include immune complex deposition, an immune response directed against the metabolites of allopurinol, or allopurinol hypersensitivity exclusively localized to the skin.