Neurothekeoma is a benign soft tissue tumour of neural origin. It is mostly seen in young females and commonly involves the head and neck region. We present a case of a 47 year old male, who presented with a nodule on his scalp. It was clinically diagnosed to be a case of sebaceous cyst however histologically proven to be a myxoid neurothekeoma. The histologic variants include myxoid, cellular and mixed tumors. Myxoid neurothekeoma is a cutaneous neoplasm of nerve sheath origin. This case report presents the rarity of the lesion that needs to be differentiated from lesions of similar histological features.