Although the etiology of the carpal tunnel syndrome is unknown for most of the cases, large soft tissue tumors in the palmar region of the hand can cause median nerve compression. We present a 65-years-old female patient complaining of numbness and paresthesia in the 1st, 2nd, 3rd and radial half of the 4th finger and weakness on the left hand. Physical examination revealed a large soft tissue tumor in the palmar region of the hand extending dorsally. Carpal tunnel syndrome was diagnosed according to clinical examination and nerve conduction studies and the soft tissue tumor causing pressure on the median nerve was surgically removed. The lesion was identified as lipoma following histopathological analysis. Giant lipoma causing carpal tunnel syndrome is particularly rare.