Plasma cell granuloma is a benign non-neoplastic lesion which is described under the pseudo-inflammatory tumor category. The etiologies of this lesion are complex and still remain unclear. It occurs primarily in lungs, but also been reported in other extrapulmonary sites. In oral cavity, plasma cell granuloma is exceedingly rare and present as a rapidly growing mass which show aggressive behavior and mimic a malignant tumor, posing a diagnostic dilemma. Histologically, it is composed of polyclonal plasma cells with variable components of fibroblast and myofibroblast, owing to microscopic diversity and thus inconsistent nomenclature. Simple excision plasma cell granuloma is curative with no evidence of recurrence. This is a case report of plasma cell granuloma of lower lip in a 62 years old female patient which was initially diagnosed as carcinoma of lip because of its clinical ulceroproliferative form. However, detailed radiographic and histological investigation diagnosed it to be plasma cell granuloma of lower lip.