Lipoma is a common soft tissue tumour in the human body, but at the same time is very rare in the palm and rarer still in the thenar region. These lipomas in the hand can give rise to various problems such as cosmetic, functional, and neurological compromise among others and removing them becomes important when symptomatic. Diagnosing a hand pathology becomes important as a missed diagnosis can have long-term functional consequences for a patient. In the case report, we discuss a hand palmar prominence which presented as an effusion and later turned out to be a large lipoma. Further, we also present a literature review of published thenar lipoma cases to throw light on the nuances of this rare pathology location, which, to our knowledge, has not been done comprehensively.