Septate cytoplasmic vacuoles, which are one of the cytologic findings characteristic of papillary thyroid carcinoma, are small, uniform, and well‐defined vacuoles, with defined strands of cytoplasm separating them. We report on a case with histologic and ultrastructural findings corresponding to septate cytoplasmic vacuoles, which have not been previously described. The patient was a 51‐yr‐old man with a mass in the left anterior of the neck, measuring 4.0 × 3.5 cm in diameter. Aspiration cytology smears revealed findings typical of papillary thyroid carcinoma, including papillary tissue fragments, intranuclear inclusions, nuclear grooves, powdery chromatin, and psammoma bodies. The tumor cells which were located at the periphery of small three‐dimensional clusters, and others which showed a sheet‐like arrangement, demonstrated uniform, small vacuoles in relatively abundant, dense cytoplasm. Histologically, a small number of papillary thyroid carcinoma cells with multiple vacuoles were observed, which were limited to the hobnail‐shaped cells located at papillary configurations or floating tumor cells within the papillary lumen. Ultrastructurally, the hobnail‐shaped tumor cells demonstrated various‐sized dilated rough endoplasmic reticulum and rich heterochromatin. We emphasize that septate cytoplasmic vacuoles correspond to dilated rough endoplasmic vacuoles and are probably related to degenerative changes. Diagn. Cytopathol. 2000;23:351–353. © 2000 Wiley‐Liss, Inc.