Periosteal ganglionic cysts are rare. The precise etiology and pathogenesis are still obscure. We have experienced a case of periosteal ganglionic cystic defect developed in the neck of right fibula. Subcutaneous bursting of this cyst compressed adjacent peroneal nerve and complicated with peroneal nerve palsy. Treatment consisted of excision of the ganglionic cyst and decompression of peroneal nerve. The result and prognosis were fair.