Alteration in the color of lunula can be an indication of either a cutaneous or systemic disorder or a systemic drug side effect. Hydroxyurea, an antitumor systemic agent (a ribonucleoside diphosphate reductase inhibitor) used in the treatment of refractory psoriasis as well as in the variety of neoplastic disorders is known to cause brownish pigmentation of the nails but hydroxyurea induced blue lunula is very rare. It is being reported in a 45-year-old man with chronic recalcitrant plaque psoriasis on oral hydroxyurea 500 mg twice daily. Lunular pigmentation in finger and toenails developed two weeks later. During follow up, pigmentation remained localized to the proximal portion of nails.