Approximately 100 cases of segmental neurofibromatosis (NF5) have been reported in the recent literature. Patients with NF5 present with café-au-lait macules, freckles, and/or neurofibromas limited to one or adjacent dermatomes. Neurofibromas arising in NF5 have been uniformly considered to be benign; patients were thought to have an excellent prognosis without the risk of developing malignant peripheral nerve sheath tumors (PNSTs), which are characteristic in patients with the generalized form of this disease, von Recklinghausen's NF. In this report the authors detail the first observations of malignant PNSTs in two patients with NF5. Indications for surgical removal of a neurofibroma in a patient with NF include pain. neurological impairment, compression of adjacent structures, cosmetic disfigurement, and rapid tumor growth suggestive of malignant degeneration. Surgical indications are similar for patients with NF5. All patients with neurofibromas should be considered at risk for malignant degeneration.