Parosteal osteosarcoma (POS) is a low-grade well-differentiated variant of osteosarcoma that affects the metaphyseal surface of a long bone. Although Grade-1 POS sometimes involve the medullary canal, such patients are not at a greater risk of local recurrence or metastases. In this report, we describe a rare case of POS in the right distal femur with an intramedullary sclerotic lesion mimicking medullary involvement caused by secondary remodeling of the underlying cortex of the tumor. A 34-year-old woman complained of having a painful hard mass in her right knee for six months. Imaging studies revealed a broad-based sclerotic mass attached to the cortex of the distal and lateral aspect of the femur, along with an intramedullary lesion. Histopathological examination of a biopsy specimen revealed Grade-1 POS. We diagnosed a medullary involvement and we performed a wide resection, including the intramedullary lesion. Histopathological examination of the resected specimen revealed that the intramedullary lesion only exhibited remodeling of the underlying tumor cortex without tumor cell invasion. To the best of our knowledge, this is the first report of such imaging features and pathological findings in a patient with POS. Our experience with the present patient indicates that good local control and overall prognosis of patients with medullary involvement in Grade-1 POS may be due to the remodeling of the underlying cortex mimicking "medullary involvement." This feature will add to the range of diagnostic difficulty experienced during the preoperative staging of POS.