Dermal neurofibromas (dNFs) are benign tumors of the peripheral nervous system typically associated with Neurofibromatosis type 1 (NF1) patients. Genes controlling the integrity of the DNA are likely to influence the number of neurofibromas developed because dNFs are caused by somatic mutational inactivation of the NF1 gene, frequently evidenced by loss of heterozygosity (LOH). We performed a comprehensive analysis of the prevalence and mechanisms of LOH in dNFs. Our study included 518 dNFs from 113 patients. LOH was detected in 25% of the dNFs (N = 129). The most frequent mechanism causing LOH was mitotic recombination, which was observed in 62% of LOH-tumors (N = 80), and which does not reduce the number of NF1 gene copies. All events were generated by a single crossover located between the centromere and the NF1 gene, resulting in isodisomy of 17q. LOH due to the loss of the NF1 gene accounted for a 38% of dNFs with LOH (N = 49), with deletions ranging in size from ∼80 kb to ∼8 Mb within 17q. In one tumor we identified the first example of a neurofibroma-associated second-hit type-2 NF1 deletion. Analysis of the prevalence of mechanisms causing LOH in dNFs in individual patients (possibly under genetic control) will elucidate whether there exist interindividual variation.