Nineteen cases of fibrolipomatous hamartoma of nerve without macrodactyly and seven cases with macrodactyly are discussed. Twenty-five involved the hand, wrist, palm, and finger, and one case involved the foot. Nineteen patients had isolated fibrofatty enlargement of nerve, while seven had macrodactyly in addition to the peripheral nerve changes. Involved nerves included the median nerve, ulnar nerve, an unidentified nerve near the elbow, and a nerve on the dorsum of the foot. Four of nine patients with neurologic symptoms of pain or paresthesias had physical findings compatible with compression neuropathy, and two others were described as having carpal tunnel syndrome. Most patients had been aware of a mass for several years. Microscopically, the lesion was characterized by fibrofatty enlargement of nerve with massive epineural and perineural fibrosis. In two of the cases with macrodactyly, the fibrofatty enlargement of the nerve was associated with overgrowth of bone and the surrounding subcutaneous tissues. In one case, the perineural fibrosis was associated with metaplastic bone. The histogenesis of fibrofatty overgrowth of nerve has been disputed. Mature fat cells have been described within the normal nerve sheath, and it is thought that proliferation of these cells leads to the fatty enlargement of the nerve and its coverings. The relationship of these neural changes to the development of macrodactyly remains controversial. Follow-up in 18 patients (69%) reveals a benign course following biopsy, limited excision, or division of the flexor retinaculum in the wrist.