It is well known that patients with diabetes mellitus (DM) may demonstrate skin manifestations, or dermadromes, due to disease-related metabolic, vascular, neurologic, and/or immunologic disturbances; however, the pathogenesis of some of these manifestations remains unknown. Xanthomas often are associated with increased levels of serum cholesterol and/or triglycerides and therefore can present as a dermadrome in patients with a history of uncontrolled DM and hyperlipidemia. The presence of tender lesions in this patient population can indicate a diagnosis of perineural xanthoma. We report a case of perineural xanthoma arising in a patient with type 2 DM and hyperlipidemia.