Angiolymphoid hyperplasia with eosinophilia or epithelioid haemangioma is a rare benign vascular proliferative disorder usually affecting the scalp, face and neck and rarely reported in peripheral locations. Differentiation from Kimura disease, tuberculoma and Kaposi sarcoma is of utmost importance. The literature has no consensus in the treatment due to the paucity of cases reported. The recurrence rate has varied between 5-55% with the least rates reported after surgical excision. We report in a 15-year boy, a giant sized epithelioid haemangioma occurring as left prepatellar bursa swelling and presenting with a diagnostic dilemma. He underwent excision and wide marginal clearance and no adjuvants. He had no recurrence in a follow-up period of two years. We report this case in view of its varied presentation of this pathology and also review the cases of angiolymphoid hyperplasia with eosinophilia having unusual presentations and its current management.