This case report details a rare occurrence of a vellus hair cyst presenting as a recurrent nodular swelling on the medial aspect of the right eye in a 23-year-old male. The patient underwent surgical excision guided by imaging studies, and the subsequent two-month follow-up revealed no signs of recurrence. Imaging, including contrast-enhanced computer tomography (CECT), played a crucial role in assessing the extent of the lesion and ruling out intracranial involvement. Histopathological examination confirmed the diagnosis, revealing cystic spaces with an attenuated lining containing vellus hair and marked fibrosis. The case underscores the importance of considering uncommon entities in differential diagnoses, emphasizes the efficacy of complete cyst removal in preventing recurrence, and contributes to the evolving understanding of vellus hair cysts. Further research is warranted to enhance our knowledge of their epidemiology and optimal management strategies.