Local tumor compression is the main mechanical cause of posterior interosseous nerve palsy. The reported cases of these tumors do not include that of pigmented villonodular synovitis. Here, we report a case of a 53-year-old male with a 9-year history of painless swelling in his left elbow and a few months of progressive weakness in his left hand. Imaging identified the mass, and histological examination of the biopsy specimens revealed pigmented villonodular synovitis. The mass was compressing the nerve at the arcade of Frohse, and we performed a complete resection of the mass. Following removal of the mass, the patient regained complete function in his left upper extremity, and no local recurrence has been detected after 2 postoperative years. The possibility of pigmented villonodular synovitis should be considered in the differential diagnosis of posterior interosseous nerve palsy.