Extramedullary hematopoiesis associated with thalassemia causing spinal cord compression is an extremely rare event in the course of the disease. Documentation with an imaging technique, such as MRI, is mandatory. A patient with thalassemia intermedia, who developed paraparesis in spite of transfusion, underwent surgical decompression. Rapid neurological improvement was observed postoperatively and this neurological condition was protected with adequate hemoglobin level. Management of these patients remains controversial. Various modes of therapy such as surgical decompression, radiotherapy, and transfusion are discussed and the related literature is reviewed.