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Popliteal cyst developing in the sheath of a peripheral nerve or joint capsule may cause compression neuropathy. Although popliteal cyst is very common lesion, it seldom causes serious complications. Common peroneal nerve compression is rarely caused by an extraneural popliteal cyst.We presented the case of a 52-year-old female with common peroneal nerve compression caused by an extraneural popliteal cyst.Electromyography showed the damage of common peroneal nerve. MRI magnetic resonance imaging showed the lump to be a popliteal cyst. She was diagnosed as peroneal nerve injury and popliteal cyst.The patient was performed peroneal nerve decompression and popliteal cyst excision surgery. We excised the cyst completely and soluted the common peroneal nerve thoroughly. The cyst was filled with thick mucinous material.The pathological report showed that the excised mass was a popliteal cyst. There were no postoperative complications. Pain and hypoesthesia resolved 6 months after surgery.In this case, compression of the common peroneal nerve was due to an extraneural popliteal cyst, a situation rarely encountered. MRI can show in better detail their size and internal contents as well as their relation with surrounding anatomic structures. Patients with nerve entrapment caused by enlarged or ruptured cysts must be microsurgically excised if symptomatic.