Malignant tumors of the upper extremity are uncommon, and their care should be referred to specialized facilities with experience treating these lesions. The Musculoskeletal Tumor Society (MSTS) staging system is used by the surgeon to determine appropriate surgical management, assess prognosis, and communicate with other healthcare providers. Magnetic resonance imaging (MRI) is employed pre-operatively to identify a lesion's compartment of origin, determine extent of spread, and plan biopsy and resection approaches. Involvement of neurovascular structures may result in devastating loss of upper extremity function, requiring amputation. Violation of high-resistance compartmental barriers necessitates more extensive surgical resection. Biopsy may be performed by the radiologist using imaging guidance. Knowledge of compartmental anatomy allows the radiologist or surgeon to use an easily excisable biopsy approach and prevent iatrogenic spread to unaffected compartments. Case examples are presented to illustrate the importance of compartmental anatomy in the management of benign and malignant upper extremity tumors.