Merkel cell carcinoma (MCC) is a cutaneous neoplasm that is challenging to diagnose secondary to its rarity. We report a case involving a 76-year-old Caucasian female with a seemingly benign skin nodule on her right forearm. Histopathological analysis revealed characteristics of MCC, including uniform round cells with minimal cytoplasm and fine granular chromatin. Immunohistochemical staining confirmed insulinoma-associated protein 1 (INSM1) positivity, a marker with high sensitivity and specificity in localized MCC diagnosis. The subsequent treatment plan involved wide local excision, sentinel lymph node evaluation, and radiation therapy, aligning with therapeutic standards for MCC. Negative positron emission tomography (PET) scans and follow-up for one year have demonstrated no evidence of recurrence or additional lesions. This case demonstrates the challenges in diagnosing MCC and the need for histopathological and immunohistochemical assessments for an accurate diagnosis. Diagnostic markers, INSM1, are important distinguishing factors between MCC and other skin cancers. In conclusion, our case contributes to the literature in diagnosing MCC and successful treatment, while emphasizing the need for immunohistochemical markers for accurate diagnosis and guiding therapeutic decisions.