Palisaded encapsulated neuroma (PEN) or solitary circumscribed neuroma is a benign neural tumor first described by Reed et al. [1] in 1972. It mainly occurs as a single, asymptomatic papule or nodule that slowly grows on the face of a middle-aged adult, and rarely occurs in the oral cavity, shoulder, trunk, limbs, etc. [2]. Histopathologic examination reveals an encapsulated dermal nodule comprised of proliferating Schwann cells and axons arranged in bundles. A total of three cases of PEN on the lips have been reported in South Korean literature [3][4][5]. It is assumed that this is due to the characteristic of PEN, which is asymptomatic and does not occur in the oral cavity. Herein, we report a rare case of PEN on the lips, along with a review of clinical and histological features.Palisading encapsulated neuroma is a rare, benign, cutaneous nerve sheath tumor. It usually occurs as an asymptomatic solitary skin-colored papule and commonly affects the nose and cheeks. Sometimes, it involves other sites, including the shoulder, upper arm, and trunk, but rarely involves the oral mucosa, including that of the lip. In our case, a 63-year-old female patient complained of a pinkish rubbery nodule on her lower lip. Histopathologic examination demonstrated a well-circumscribed nodule encapsulated by connective tissue stroma in the dermis. The nodule consisted of palisading spindle-shaped tumor cells with wavy and basophilic nuclei. The cells were arranged in streaming fascicles with multiple clefts and were strongly positive for S-100 proteins. To our knowledge, only three cases of palisading encapsulated neuroma on the lower lip have been reported in the Korean literature. Herein, we report a rare case of an oral palisaded encapsulated neuroma.