Central giant cell granuloma (CGCG) is a benign intraosseous lesion of the jaws. The lesion is considered to be a reactive phenomenon, a developmental anomaly, or a benign neoplasm. The clinical behavior of the lesion varies from an asymptomatic osteolytic lesion that grows slowly without expansion (non-aggressive), to an aggressive, painful process. Radiographically, the lesions appear as unilocular or multilocular radiolucencies with well-delineated borders. The occurrence of CGCG in the posterior mandible is a rare incidence. The present case is that of a 28-year-old female patient with a complaint of slow growing posterior mandibular swelling. The rarity of CGCG in the mandibular body-ramus area creates a diagnostic challenge as ameloblastoma, aneurysmal bone cyst, and odontogenic myxoma present commonly in the posterior mandibular region. Diagnosis is critical as a conservative line of management can be followed in case of CGCG as compared to radical treatment required in other lesions. This report describes the unusual presentation, the differential diagnosis, radiographic features, and management of this lesion.