Lipofibromatosis is a slow-growing, childhood soft-tissue neoplasm that is often confused with other conditions. We report a patient with lipofibromatosis causing extremity enlargement at birth. The lesion initially was thought to be a vascular anomaly or lipedema on clinical and MRI examination. When involving the lower extremity, diffuse lipofibromatosis must be differentiated from more common causes of lower limb enlargement in children: lymphatic malformation, lymphedema, or lipedema. Compared with these more frequent conditions, lipofibromatosis usually causes less morbidity. Management of the tumor includes observation or excision. Because complete extirpation of the lesion is difficult, the recurrence rate is high.