In some embodiments, an illuminated microsurgical instrument system includes a microsurgical instrument having a distally projecting tubular member arranged to perform a medical procedure. The tubular member has a distal tip and an outer surface, the outer surface having a flat surface formed therein. The instrument includes a sheath member surrounding a portion of the tubular member and extending toward the distal tip of the tubular member and an optical fiber extending along a length of the flat surface between the tubular member and the sheath member. The instrument may include an opening such as a slot in the distal end of the sheath member to direct exiting air away from the tip of the optical fiber. The instrument may further include a slack chamber, collar structure, and fiber guard member to support and guide the optical fiber to the distal tip.