Lipomas are common benign tumours, but intrathoracic lipomas are rare and peripheral lung lipomas are exceptionally rare. Eight cases have been described in the world literature. We report a case of lipoma arising in the periphery of the left lower lung in a 54-year old woman. Grossly, it was presented as a well-circumscribed, thinly encapsulated, rounded, pale yellow mass. A wedge resection was done of the left lung and the microscopic findings revealed lipoma of the lung. The present paper recapitulates the macroscopic and microscopic features, the treatment and the differantial diagnosis of this rare neoplasm.