Congenital Dermatofibrosarcoma Protuberans (DFSP) is an extremely rare low-grade soft tissue sarcoma arising from the dermis. Accounting for less than 0.1% of all malignancies and approximately 1% of soft tissue sarcomas, congenital DFSP presents a significant diagnostic challenge due to its atypical presentation in neonates and infants. Often mimicking benign skin lesions such as hemangiomas, vascular malformations or pigmented moles, it is frequently misdiagnosed, leading to delays in appropriate treatment. This narrative review highlights the importance of early recognition and accurate diagnosis of congenital DFSP to prevent aggressive local growth and reduce the risk of recurrence. We discuss the epidemiology, clinical presentation and diagnostic hurdles associated with this condition. Histopathological examination remains the gold standard for diagnosis, with characteristic findings of spindle-shaped cells in a storiform pattern and strong CD34 positivity on immunohistochemical staining. Imaging modalities such as MRI may be helpful in assessing the extent of the lesion. Surgical excision with clear margins, preferably using Mohs micrographic surgery, is the cornerstone of treatment, balancing oncological control with functional and aesthetic considerations in paediatric patients. A multidisciplinary approach involving dermatologists, paediatric surgeons, oncologists and pathologists is essential for optimal management. We also emphasise the need for clinician vigilance, early biopsy of suspicious lesions, patient education and long-term follow-up to improve outcomes and quality of life for affected children.