Intraosseous xanthoma of the mandible is a rare benign disorder. A 17-year-old male patient presented with a suspected abscess in the right mandibular third molar, detected on a panoramic radiograph. The patient had no history of systemic or lipid-related metabolic diseases and complained of no specific symptoms or pain. A radiographic examination revealed a heterogeneous radiolucency extending from the apical to the distal aspect of the right mandibular third molar tooth germ. The lesion measured 9×16×24 mm (antero-posterior×mediolateral×supero-inferior) and showed a relatively well-defined, multilocular, foamy appearance with hyperostotic borders spreading to the inferior alveolar nerve canal. After excisional biopsy, a diagnosis of central xanthoma was made. The lesion recurred, and intraoral vertical ramus osteotomy was done near the lesion. For the treatment of xanthoma of the mandible, extensive and delicate surgical treatment under general anesthesia should be considered.