Well-differentiated thyroid carcinoma of a thyroglossal duct cyst (TGDC) is a rare entity, found in about 1% of all TGDCs. Diagnosis is usually made incidentally after a Sistrunk procedure. Options for further therapy include total thyroidectomy, T4 suppression therapy, and radioactive iodine ablation. In a patient with a normal-appearing thyroid gland and no evidence of metastatic disease, the treatment course is controversial. The recent literature emphasizes the identification of risk factors that may prompt the clinician to pursue more aggressive treatment. We present the case of a 35-year-old woman who was found to have a 1-cm midline neck mass that showed atypical cells on fine-needle aspiration. Histologic analysis after a Sistrunk procedure revealed a small focus of papillary carcinoma within the TGDC. The patient subsequently underwent total thyroidectomy with no evidence of carcinoma on histologic examination.