Lobular capillary hemangioma (pyogenic granuloma) is a common vascular proliferation that typically occurs in the superficial dermis, although rarely a subcutaneous form has been reported. Although these lesions are considered benign, localized recurrence after excision and satellite spread of the lesions are known phenomena. A case of lobular capillary hemangioma with the unusual features of both subcutaneous localization and locally aggressive behavior following surgery in a patient with a history of estrogen use and local trauma prior to the onset of the lesion is presented. The literature of lobular capillary hemangioma is reviewed, and the differential diagnosis is discussed.