Intrsneural ganglion cysts of the peroneal nerve are rare. The precise etiology and pathological changes remain obscure. We have experienced recently a case of intraneural ganglion cyst developed in the sheath of the peroneal nerve. A 28 year old male had suffered from lump producing pain over the posterolateral aspect of the upper portion of the fibula, weakness of dorsiflexion of the ankle and of extension of the toes and diminution of sensation on the dorsum of the foot. He underwent excision of the ganglion and the prognosis for recovery of function is good.