Desmoplastic fibroblastoma, also known as collagenous fibroma, is a rare benign mesenchymal neoplasm that primarily arises in the subcutaneous tissue of upper extremities and limb girdles. The knee is an uncommon location for desmoplastic fibroblastoma. Recent studies have demonstrated the presence of immunoreactivity for FOS like 1 (FOSL1) and rearrangements of FOSL1. A 70-year-old woman presented with a 1-year history of a palpable mass in the medial aspect of the right knee. Physical examination revealed a 4-cm, elastic hard, mobile, nontender mass. Magnetic resonance imaging (MRI) showed a well-defined mass with prominent low signal intensity on all pulse sequences. Contrast-enhanced MRI demonstrated mild internal enhancement with rim enhancement. After an open biopsy, the lesion was successfully treated by complete excision. Histologically, the tumor was composed of bland spindle or stellate-shaped cells embedded in an abundant collagenous stroma. Immunohistochemically, the tumor cells showed diffuse nuclear positivity for FOSL1. These findings were consistent with a diagnosis of desmoplastic fibroblastoma. The patient was asymptomatic and there was no evidence of local recurrence eight months after surgery. Desmoplastic fibroblastoma is a distinctive benign soft-tissue tumor with FOSL1 immunoreactivity and should be clearly distinguished from more biologically aggressive mesenchymal neoplasms.