Deep tissue fungal infections of the hand are exceedingly uncommon. We present a case of fungal tenosynovitis caused by Phialophora verrucosa that led to extensor tendon rupture in a patient who was on chronic immunosuppressive therapy. Indolent fungal cysts can elude clinical diagnosis until excision is performed with definitive pathologic examination. In immunocompromised patients, antifungal therapy may be warranted after cyst excision even in the absence of acute infection to prevent subsequent progression to tenosynovitis.