Objective Lipochoristomas comprise 0.1% of all cerebellopontine angle tumors and may be misdiagnosed as vestibular schwannomas. We describe a lipochoristoma of the internal auditory canal (IAC) and present the salient features of the evaluation, diagnosis, and management. Study Design and Methods Retrospective case review. Results (Case Report) A 51-year-old woman presented with left-sided severe hearing loss, tinnitus, mild episodic vertigo, and facial paresthesias progressive over 1 year. Magnetic resonance imaging (MRI) demonstrated a small (5 × 4 mm) T1 hyperintense lobulated lesion in the distal internal auditory canal. With fat-suppressed images, there was no enhancement of the lesion. A diagnosis of IAC lipochoristoma was made. Conservative management was recommended, and on 17-month follow-up there was no interval growth. The patient remains symptomatically stable with improved equilibrium but persistent left-sided hearing loss. Conclusions Differential diagnosis of an enhancing lesion in the IAC includes acoustic neuroma, meningioma, epidermoid and arachnoid cysts, lipochoristoma, and metastatic tumors. Fat-suppressed MRI sequences aid in a definitive diagnosis of lipochoristomas. Because lipochoristomas may have a tendency for more indolent growth and intimate involvement of the auditory nerve, conservative management with interval imaging is recommended. Surgical treatment is reserved for growing lesions or those with disabling vestibular symptoms.