A 55-year-old man with scleroderma treated with prednisone and etanercept presented with enlarging sporotrichoid nodules on the forearm. Microscopically, there were large circumscribed dermal and subcutaneous nodules of spindled and epithelioid cells, resembling a spindle cell neoplasm. Small foci of neutrophils were also present, and a subsequent Ziehl-Neelsen stain highlighted beaded acid-fast bacilli in the interstitium. Tissue culture demonstrated Mycobacterium chelonae. Cutaneous mycobacterial spindle cell pseudotumor is an exceedingly rare lesion, with only 6 previously reported cases. Although these included patients with autoimmune disease receiving immunosuppressive therapy, this is the first case reported in association with a tumor necrosis factor alpha inhibitor, etanercept. Furthermore, this represents the first mycobacterial spindle cell pseudotumor described in association with M. chelonae. Mycobacterial spindle cell pseudotumor should be considered in the differential diagnosis of cutaneous spindle cell proliferations, especially in immunocompromised patients.