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A 65-year-old female patient presented to the general surgery outpatient department with a nodule in the left palm for 3 months. She gave a history of having pricked her left hand while preparing a composite by crushing dried leaves in her farm. Clinical examination revealed a tender 1 cm × 1 cm hemispherical swelling with well-defined margin in the palm of the left hand which was firm in consistency. There was no foreign body or signs of inflammation. A clinical diagnosis of implantation dermoid cyst was made. The swelling was excised and sent for histopathological examination. Histopathology showed palisaded granuloma with suppuration and cyst formation, with vegetable matter and occasional fungal hyphae resembling a phaeohyphomycotic cyst. A surgically treatable fungal disease may be a differential diagnosis for a swelling in the hands and feet, especially in population exposed to these pathogens.