Lipomas occur infrequently inside the palmar space and rarely induce nerve entrapment. We report a large lipoma in the deep palmar space associated with carpal tunnel syndrome in a 66 year-old woman. The use of magnetic resonance imaging is helpful for the tumor localization, preoperative diagnosis and planning of the operative procedure. Surgical excision of the tumor was performed without any sign of recurrence after 7 months follow-up.