Subcutaneous zygomycosis, also known as basidiobolomycosis, is a rare disease caused by the fungus Basidiobolus ranarum. Since its first description in 1954, may cases have been reported. In India, so far only few cases have been described. We report this entity in a 3 year- old female child who had firm to hard swelling of the right upper extremely and chest. Histopathology showed short aseptate hyphae surrounded by eosinophilic material within the granulomatous tissue response, in the subcutaneous tissue. She responded dramatically to saturated solution of potassium iodide.