This report describes a giant cell (reparative) granuloma in the proximal phalanx of the third finger of the right hand in a 52-year-old man. Radiographically it showed aggressive features with bony permeation, breaking of the cortex, and soft tissue extension. These features suggested a malignant lesion. Histology was characteristic of giant cell reparative granuloma. This lesion, along with aneurysmal bone cyst and giant cell tumor in the small bones of hand and foot, occasionally may show aggressive features mimicking a malignant lesion.