Retropharyngeal lipoma is a very rare benign tumor of retropharyngeal space. The direct correlation between head and neck lipoma with obstructive sleep apnea syndrome is again extremely rare. Such fatty tumors also carry rare possibility of being liposarcoma, which further warrants their surgical excision. We describe a case of lipoma of retropharyngeal space that extends from nasopharynx to hypopharynx causing symptoms of obstructive sleep apnea. Mini Polysomnography, MRI and histopathological examination confirmed the obstructive sleep apnea syndrome is due to retropharyngeal space lipoma. Surgical removal of lipoma cured the obstructive sleep apnea syndrome.