Paratesticular liposarcomas are rare tumours which account for 12% of all liposarcomas. Probably there are about 186 cases which have been reported till date. They must be differentiated from tumours of testicular origin which have extension to the spermatic cord. We are reporting a case of a 50-year-old male who had presented with a painless swelling in the right hemiscrotum, which was of 20 years' duration. Inititally, a clinical diagnosis of testicular tumour was made; however, CT of the scrotum revealed paratesticular tumour? liposarcoma and testis being normal and displaced postero-inferiorly. Metastatic work-up, which included CT of the abdomen and pelvis, thorax and whole body scan, did not reveal any distant metastasis. Patient underwent high orchidectomy, hemiscrotectomy. Histopathological studies confirmed the diagnosis of well-differentiated liposarcoma (atypical lipomatous tumour of sclerosing type).