A 58-year-old Negro diabetic woman presented with short-term panniculitis and suppurative arthritis. This case was a difficult diagnostic problem until isolation and identification of Blastomyces dermatitidis was accomplished by culture of the knee-joint fluid and an excised subcutaneous skin nodule. The clinical and histopathologic appearance of the short-term and resolved lesions of this unusual presentation are described and compared with the classic skin lesions of North American blastomycosis. An 11-week course of therapy with amphotericin B resulted in an apparent cure.