The Prime Minister was swimming off the Arrieta beach in Lanzarote when he encountered the sea creature. He was reported to have ignored warnings from the locals about jellyfish in the area to enjoy a dip in the water.
But Mr Cameron, who has been on holiday at a spa resort with his wife Samantha and their children, apparently ran out of the water rubbing his arm and shouting: "ouch! ouch! ouch!"
A source close to the Prime Minister said: "It was pretty minor sting and did not require treatment."
Wendy Lambert, 59, who promotes a local naturist beach, revealed that one of her friends had warned Mr Cameron: "There's loads of jellies down there. Everyone got out of the water and his kids walked back with their minders around the pier.
"But then he decided to get back in and suddenly came out shouting in agony after getting stung."
Mrs Lambert, who has lived at the Canary Island resort for 12 years, described the type of jellyfish that lurked in local waters as "a reddy colour, quite small but with very long tentacles"..
Her husband Alan joked that one traditional cure for a jellyfish sting is for someone to pee on the affected area, and added: "There would have been no shortage of volunteers to administer the treatment."