Malignant peripheral nerve sheath tumors are rare soft tissue sarcomas with histological and immunohistochemical similarities to spindle cell melanoma. Although spindle cell melanoma is significantly more common, both tumors may express S100 and lack staining for HMB-45, Melan-A or MITF. Here we present a case of superficial malignant peripheral nerve sheath tumor with diffuse S100 positivity arising in a subtle neurofibroma in close proximity to an intradermal melanocytic nevus. This configuration had led to prior misdiagnosis as a desmoplastic melanoma arising in the nevus and to sentinel lymph node biopsy. Identification of the background neurofibroma, as well as CD34 positivity raised consideration of a low grade malignant peripheral nerve sheath tumor, which was confirmed via observation of Schwannian differentiation on electron microscopy. The importance of distinguishing these two tumors is stressed owing to the difference in management.