We report a case of papillary carcinoma of the thyroid that arose in a branchial cyst. The patient, a 45-year-old woman, presented with a left lateral neck mass of 3 months' duration. The cyst was removed intact. Because we could not rule out the possibility that a small primary malignancy was present within the gland, we performed a total thyroidectomy; however, no occult primary tumor of the thyroid was found. The patient was placed on thyroid hormone replacement therapy, and she was well at 2 years of follow-up. We briefly review the literature regarding the possible embryologic origin of such a phenomenon and the role of fine-needle aspiration cytology in differentiating a branchial cyst from a metastatic lymph node. To the best of our knowledge, this is only the 11th reported case of a thyroid papillary carcinoma arising in ectopic thyroid tissue within a branchial cyst, and the second such report from India.