Background Intraspinal dermoid cysts are rare and benign tumors that occur primarily due to the defective closure of the neural tube, an ectodermal derivative, during the process of development. They are slow-growing tumors manifesting in the second and third decades of life. Case presentation We present here a case of a 14-year-old Sindhi boy with a six-month history of paraparesis of the lower limbs and a progressive loss of power of grade 3/5, and hypoesthesia in the L4/L5 dermatomes of his right lower limb. A plain magnetic resonance imaging scan revealed a well-demarcated intraspinal intramedullary cyst containing an abscess at the level of T12 and L1 causing localized cord compression, which was producing the symptoms. Near total excision of the cyst was successfully performed and was sent for biopsy, which revealed keratinocytes and keratin flakes. With one month of follow-up, along with physiotherapeutic management, the patient gradually improved and was able to walk without support. Conclusions Critical evaluation of every case with aggravating symptoms should be carried out, and neurological and radiological examinations should be conducted to ensure the well-being of patients.