Osteolipoma is an extremely rare histologic variant of lipoma. It is sometimes called lipoma with osseous element. It can occur in any part of the body ranging from intracranial cavity to different musculoskeletal regions. We presented a case seen in a 40 years old Nigerian woman with a non-enlarging, non-tender swelling in the right leg just below the knee joint medially. The diagnosis was confirmed by histology after excisional biopsy which examination showed sheets of matured adipocytes traversed into lobules by fibro collagenous strands. Osteolipoma is still relatively rare. However, they are benign and should not be confused with other sinister lesions.