The lateral femoral cutaneous nerve (LFCN) can be visualized with ultrasound imaging using a high frequency linear transducer. The entrapment of the LFCN, often near the lateral aspect of the inguinal ligament, is accepted as an etiology of meralgia paresthetica (MP). This case report describes an ultrasound-guided, percutaneous technique that utilizes injected fluid to facilitate blunt dissection (or hydrodissection) to perform an external neuroplasty of the LFCN. This procedure resulted in immediate, long-term relief of pain associated with severe, chronic MP. This procedure may potentially represent an alternate treatment for patients with contraindications or partial contraindications to surgical neurolysis, nerve transection (usually described as being performed under general anesthesia), or corticosteroid injection, or in patients not responding to conservative treatment measures.