A case of intraosseous well-differentiated osteosarcoma in one phalanx of the hand is reported. A 78-year-old man noticed swelling in the little finger of his right hand approximately 7 years before referral. Imaging disclosed a tumour with a "ground glass" appearance and irregular mottled calcification occupying almost all of the phalanx marrow and suggested slight invasion into the soft tissue. Open biopsy suggested a diagnosis of well-differentiated fibroblastic osteosarcoma. The finger and its metacarpal bone were amputated and a tumour measuring 3.5 x 2.2 x 2.0 cm and with an indistinct soft tissue margin was found in the bone marrow. Histologically, the tumour was composed of fibroblastic cells with few mitoses, and neoplastic bone formation was apparent. Although the tumour appeared to be a fibrous dysplasia, the presence of nuclear atypia, hypercellularity, and the absence of a typical woven bone pattern in addition to the soft tissue invasion indicated otherwise. Ultrastructural examination showed focal myofibroblastic differentiation, and immunohistochemistry revealed smooth muscle actin, vimentin, osteocalcin, osteonectin and MIBI in the tumour cells. This ultrastructural and immunohistochemical study is believed to be the first detailed report of an intraosseous well-differentiated osteosarcoma of phalangeal bone.