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Opportunistic subcutaneous fungal infections are increasing in present times due to increasing incidence of many medical conditions causing immunosupression like diabetes, AIDS, organ transplant recipients and anticancer therapy. Pyrenochaeta romeroi, a fungus from the dematiaceae group, first described by Borelli in 1959, is saprophyte to soil and plants.We present a rare case of subcutaneous phaeohyphomycotic cyst in a diabetic female caused by P. romeroi.