Lymphomatoid papulosis is a chronic CD30-positive cutaneous lymphoproliferative disorder that is characterized by recurring red-brown necrotic papules. It exhibits a wide spectrum of histopathologic findings and is often associated with cutaneous T-cell lymphomas. Six different histological subtypes have been classified by the WHO, but there is limited understanding regarding rare histopathologic variants. We describe a 51-year-old man who presented with recurring, necrotic papules for 6 years that progressed to involve the face, scalp, trunk, axilla, and scrotum. Histopathology demonstrated sarcoidal granulomas, along with a CD30-positive T cell infiltrate which demonstrated clonality by T cell receptor gamma gene rearrangement. A diagnosis of lymphomatoid papulosis associated with granulomas was established based on the clinical and histopathologic presentation. The clinical understanding of granulomatous lymphomatoid papulosis is limited in the available literature and more awareness of this histopathologic variant is required for accurate classification of this disorder.