We present the case of a 56-year-old woman who developed carpal tunnel syndrome and palmar scar contracture secondary to a left-hand palmar laceration in a pedestrian versus motor vehicle accident. The patient underwent carpal tunnel release and a Z-plasty rearrangement to restore normal thumb movement. The patient reported significant improvement in thumb mobility, resolution of median neuropathy symptoms, and no pain along the scar at her three-month follow-up. Our case illustrates the effectiveness of a Z-plasty in relieving tension along scars and potential management for traction-type extraneural neuropathy arising from scar contracture.