Liposclerosing myxofibrous tumor is a benign fibro-osseous lesion, with distinct radiographic and clinical features and diverse histologic patterns. This lesion occurs in the fourth decade of life, with equal male and female incidence. Most lesions are discovered incidentally, but patients can present with bone pain or fracture. Liposclerosing myxofibrous tumor exhibits a very strong predilection for the proximal femur with characteristic radiographic findings, often providing an initial clue to diagnosis. Microscopically, this tumor is characterized by a variety of patterns, including myxofibrous tissue, fibrous dysplasia-like features, and ischemic ossification. It can be mistaken for many other fibro-osseous lesions; therefore, this unique lesion should be included in the differential diagnosis of fibro-osseous lesions, particularly in this location. Patients with this lesion are generally successfully treated by curettage and bone graft and have a favorable prognosis. A small risk of malignant transformation has been suggested to be associated with these lesions. This necessitates the need for follow-up monitoring of this entity. In this review, we discuss current knowledge of this lesion and its clinical relevance.