Periosteal fasciitis is a subtype of nodular fasciitis originating from the periosteum. The diagnosis can be challenging and requires radiologic–pathologic correlation. Advances in molecular analysis confirmed that nodular fasciitis and its related lesions harbor a USP6 gene rearrangement with one of the several potential partners. Herein, we report a case of periosteal fasciitis with metaplastic bone formation detected incidentally during a radiologic survey for breast carcinoma. Radiologic examination revealed a 2.4 cm, heterogeneous, avidly enhancing lesion of the right femoral distal metaphysis concerning for low-grade periosteal chondrosarcoma. Histological examination of a core needle biopsy revealed a tumor composed of bland spindle cells with myofibroblastic and osteoblastic phenotypes admixed with immature bone and cartilaginous elements. Molecular analysis revealed a novel STAG1::USP6 fusion that helped arrive at the right diagnosis and further expands the molecular profile of USP6-associated neoplasms.