Smegma pearls can cause diagnostic dilemmas for pediatricians who are unfamiliar with this condition leading to unnecessary investigations and referrals. Despite the common occurrence of smegma pearls in uncircumcised young boys, it is not often reported in the literature. Smegma is a normal secretion consisting of desquamated epithelial cells, fat, and protein. It has mixed bacterial flora with smegma bacillus in 50% of cases. Smegma itself is neither damaging nor irritating substance and as Howe has stated, it is not carcinogenic also. Smegma production and keratinization of cells facilitate the separation of the fused foreskin from the glans epithelium. we are presenting a case of a penile nodule in the shaft of the penis without any pain, bleeding, or discharge. The smegma content gives a yellowish color to the lump. Smegma pearls do not have any covering sac. When the smegma is covered in a well-formed epithelial wall, it is called a smegma cyst. Long-standing smegma collection can turn into a hard stone-like structure called Smegmolith due to chronic irritation and mineral accumulation. Treatment should include monitoring for resolution with parental reassurance. Smegma pearls are benign, and they spontaneously resolve over time. This case report intends to help pediatricians correctly identify this benign, yet not widely published in the literature condition and reassure the parents and patients to improve the patient care and avoid unnecessary tests and referrals.