Background: Acute transverse myelitis (ATM) is an inflammatory disorder of the spinal cord with heterogeneous etiologies, including autoimmune, infectious, paraneoplastic, and drug-induced causes. Tumor necrosis factor-alpha (TNF-α) inhibitors have been infrequently associated with inflammatory central nervous system events, including transverse myelitis. TNF-inhibitor-associated myelitis typically presents with short-segment lesions, a normal brain MRI, and partial responsiveness to corticosteroids. Longitudinally extensive transverse myelitis (LETM) and steroid-refractory cases are uncommon. Case Presentation: A 39-year-old woman with psoriatic arthritis treated with etanercept for two years presented with subacute progressive bilateral lower-extremity sensory loss and weakness. MRI revealed a T2 hyperintense spinal cord lesion extending from T11 to L1 with gadolinium enhancement, consistent with transverse myelitis, while brain MRI was normal. Cerebrospinal fluid analysis showed lymphocytic pleocytosis, elevated protein, oligoclonal bands, and increased kappa free light chains. Extensive infectious, metabolic, paraneoplastic, and autoimmune testing, including aquaporin-4 and MOG antibodies, was negative. Despite high-dose intravenous corticosteroids and the discontinuation of etanercept, the patient experienced clinical worsening with lesion expansion, meeting criteria for LETM, and developed urinary retention. She subsequently underwent plasma exchange, resulting in radiologic improvement and moderate clinical recovery. Conclusions: This case highlights an atypical presentation of TNF-inhibitor-associated myelitis characterized by a biphasic course, longitudinally extensive spinal cord involvement, steroid refractoriness, and responsiveness to plasma exchange. These features suggest either an unusually severe TNF-inhibitor-related inflammatory phenotype or a TNF-inhibitor-triggered antibody-mediated demyelinating process. Reports of TNF-inhibitor-associated myelitis evolving into longitudinally extensive, steroid-refractory disease remain limited, and this presentation may broaden the recognized clinical spectrum of TNF-α-related CNS inflammatory events. Close neurologic follow-up and heightened awareness of severe CNS complications associated with TNF-α inhibitors are warranted.