In this paper we report a case of the rare entity epithelial sheath neuroma (ESN). A 66-year-old white female presented with a 1-month history of pruritic, raised, erythematous skin lesion on her upper back. The clinical impression initially led to a differential diagnosis that included lymphoma or inflamed sebaceous cyst. The patient had past medical history significant for squamous cell carcinoma of skin of the left calf status post Mohs surgery 9 years prior to presentation and inflamed seborrheic keratosis of the shoulder 3 years prior to presentation. She had no history of surgery or trauma at the area of concern for this presentation. A punch biopsy obtained to characterize the lesion showed dermal fibrosis and proliferation of nerves throughout the dermis without significant atypia, consistent with the diagnosis of ESN. The histologic differential diagnosis of ESN is presented here, and we discuss its most likely pathogenesis. This diagnosis is important for the clinician to keep in mind as excision appears to be curative, and it can easily be mistaken for many other entities.