Periosteal chondroma is a rare benign hyaline cartilage neoplasm that occurs most commonly in the metaphases of long tubular bones. We present a unique case of periosteal chondroma arising in the proximal phalanx of the left index finger in a 12-year-old boy. Physical examination revealed a slightly protuberant, subcutaneous mass. Plain radiographs and computed tomography scans showed a periosteal lesion producing saucerization of the cortex and subjacent cortical sclerosis, without internal matrix calcification. On magnetic resonance imaging, the lesion exhibited intermediate signal intensity on T1-weighted images and high signal intensity on T2-weighted images. Contrast-enhanced fat-suppressed T1-weighted images demonstrated peripheral and septal enhancement. The patient underwent a marginal excision with curettage of the underlying bone cortex. Histological examination confirmed the diagnosis of periosteal chondroma. There has been no evidence of local recurrence eight months after surgery. Periosteal chondroma can protrude into the subcutaneous soft tissue causing a palpable mass. Recognition of the typical radiological features can lead to an accurate diagnosis of this rare condition.