Carcinoma associated with thyroglossal duct cyst (TDC) is extremely rare and when it occurs it is invariably papillary carcinoma. A 36-year-old man presented with a midline swelling in the upper part of neck, which was a cystic lesion with multiple septae in ultrasonogram, indicating a thyroglossal duct cyst. The CT scan findings also corroborated the ultrasound report. Fine needle aspiration (FNA) smears showed hemosiderin laden cyst macrophages and occasional papillary cluster of neoplastic cells with central psammoma body and rare intranuclear cytoplasmic inclusions. The neoplastic cells revealed positive reaction for thyroglobulin, galectin3, and CD44. FNA cytodiagnosis was thyroglossal duct cyst with cytologic features suggestive of papillary carcinoma. The histopathological diagnosis of the resected lesion, however, was metastatic papillary thyroid carcinoma in lymph node with cystic changes; there was positive reaction for thyroglobulin, galectin3, HBME1, and CK. Following this histopathology report, thyroidectomy was performed, which revealed lymphocytic thyroiditis and no evidence of papillary carcinoma. Review of paraffin sections of upper midline neck mass showed a cavity bound by thick fibrocollageneous wall and lined partly by epithelium consistent with papillary carcinoma. The cyst wall showed dense lymphomononuclear cell infiltration and germinal center formation. There were foci of papillary carcinoma in the cyst wall with frequent nuclear grooves, cerebriform nuclei and intranuclear cytoplasmic inclusions. The reviewed histopathological diagnosis was consistent with papillary carcinoma in thyroglossal duct cyst. Thus, the FNA cytodiagnosis of a rare case of papillary carcinoma in thyroglossal duct cyst, led to review and change in histopathological diagnosis achieving cyto-histopathological correlation.