In this paper we classify Euclidean hypersurfaces $fcolon M^n rightarrow mathbb{R}^{n+1}$ with a principal curvature of multiplicity $n-2$ that admit a genuine conformal deformation $tilde{f}colon M^n rightarrow mathbb{R}^{n+2}$. That $tilde{f}colon M^n rightarrow mathbb{R}^{n+2}$ is a genuine conformal deformation of $f$ means that it is a conformal immersion for which there exists no open subset $U subset M^n$ such that the restriction $tilde{f}|_U$ is a composition $tilde f|_U=hcirc f|_U$ of $f|_U$ with a conformal immersion $hcolon Vto mathbb{R}^{n+2}$ of an open subset $Vsubset mathbb{R}^{n+1}$ containing $f(U)$.