Reported herein is a rare case of xanthogranulomatous inflammation of the gastric wall occurring in a 77-year-old man. Two submucosal lesions presented as rapidly enlarging nodules, and biopsy showed interweaving bundles of spindle cells with numerous atypical cells with marked nuclear pleomorphism. The differential diagnosis from mesenchymal malignancies, particularly from a malignant gastrointestinal stromal tumor, was difficult and immunohistochemical investigations could not improve the diagnostic accuracy of HE histology alone. Thus, an erroneous diagnosis of malignancy was made and a partial gastrectomy was performed. On macroscopic examination of the resected material, spontaneous regression of the lesions was observed and microscopic examination showed characteristic features of xanthogranulomatous inflammation; large numbers of foamy histiocytes including multinucleated giant cells were admixed with chronic inflammatory cells and fibrous reaction. Although the precise pathogenesis could not be elucidated, recognition of this unusual morphological appearance is of importance to avoid an overdiagnosis of malignancy.