We report a rare case of retroperitoneal liposarcoma developing within an incarcerated inguinal hernia. A 53-year-old man presented to our hospital with left inguinal mass. Preoperative computed tomography revealed an intraabdominal huge mass, and a clinical diagnosis of liposarcoma. Physical findings except for the inguinal mass and laboratory examination, including tumor markers (CEA, CA19-9), were within normal range. Intraoperatively, the mass was incarcerated in the inguinal canal and involved the left testis. We performed a radical tumor resection, including a left orchiectomy. The resected specimen measured 45 x 30 cm and weighed 7,510 g. Histopathologically, the tumor was diagnosed as a well-differentiated liposarcoma, and originated from retroperitoneum. We did not undergo adjuvant therapy in consideration of histopathological subtype and curable surgical treatment. The patient is well and shows no evidence of recurrence four months after the operation.