Medium band (H' and K') images of the episodic dust-forming, long-period (∼13 yr) WC7+OB binary WR 137 were obtained with the Near-Infrared Camera and Multiobject Spectrometer 2 camera of the Hubble Space Telescope during periastron passage in 1997-1998. We have resolved IR-emitting dust in the close environment of this system. The dust emission occurs in a few clumps within about 0".5 of the star, as well as in a jetlike structure with a total extension of ∼0".25. The dust is likely either created or enhanced in the zone of gas shocked by wind-wind collision. We estimate the total mass of the resolved dust features during the 1997-1998 outburst to be ∼2x10–7 M☉ (∼0.1M⊕) within a factor of 3.