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Schwannoma or neurilemmoma is a common soft tissue neoplasm arising from the neural sheath of Schwann cells. However, intraosseous schwannoma is rare, accounting for less than 0.2% of primary bone tumours. Several variants of schwannoma have been reported; among them, intraosseous schwannoma with ancient change is extremely rare. This current report presents an extremely rare case of ancient intraosseous neurilemmoma. The patient presented with right elbow pain and disability. A radiolucent, well-defined, lobulated lesion with a thin sclerotic rim in the proximal ulnar metaphysis that had caused a pathological fracture was noted. The mass was surgically excised using marginal resection and bone curettage was undertaken. The bone deficit was grafted with hydroxyapatite and β-tricalcium phosphate and augmented with bone cement. There were no signs of any recurrence after 3 years. This is the first case of an ancient intraosseous schwannoma of the proximal ulna. Although rare, intraosseous schwannoma should be considered in the differential diagnosis of radiographically benign-appearing osseous tumours in the bone. The cement technique is recommended for the treatment of intraosseous schwannoma.