Chondroid lipoma is a rare benign adipose tumor characterized by a recurrent ZFTA::MRTFB fusion. Herein, we report an unusual liposarcoma that partly exhibited overlapping features with those of chondroid lipoma and harbored a ZFTA::RELA fusion. A 59‐year‐old man presented with a shoulder mass that had existed for approximately 8 years and with increasing pain due to a pelvic mass. The 5.8‐cm resected shoulder tumor partly consisted of nests and strands of variably lipogenic epithelioid cells within a hyalinized or focally chondromyxoid stroma, indistinguishable from chondroid lipoma. The histological pattern gradually transitioned to highly cellular, stroma‐poor, diffuse sheets of cells with greater nuclear atypia and mitotic activity. Vascular invasion and necrosis were present. The metastatic pelvic tumor revealed a similar histology. Despite multimodal treatment, the patient developed multiple bone metastases and succumbed to the disease 14 months after presentation. Targeted RNA sequencing identified an in‐frame ZFTA (exon 3)::RELA (exon 2) fusion, which was confirmed by reverse transcription‐polymerase chain reaction, Sanger sequencing, and break‐apart fluorescent in situ hybridization assays. The tumor showed a different histology from that of ependymoma, no brain involvement, and no match with any sarcoma types or ZFTA::RELA‐positive ependymomas according to DNA methylation analysis. p65 and L1CAM were diffusely expressed, and a CDKN2A/B deletion was present. This is the first report of an extra‐central nervous system tumor with a ZFTA::RELA fusion. The tumor partly displayed an overlapping histology with that of chondroid lipoma, suggesting that it may represent a hitherto undescribed malignant chondroid lipoma with an alternative ZFTA fusion.