A thyroglossal duct cyst is a benign congenital lesion present in 7% of the population. Malignant transformation is rare, with an incidence of 1%, 90% of which are papillary carcinomas. We report the case of a 36-year-old woman with an asymptomatic 2.5cm neck nodule. Excision of the cyst, total thyroidectomy, and neck lymphadenectomy were performed, with a diagnosis of papillary carcinoma arising in a thyroglossal cyst, classic subtype, infiltrating the pericystic soft tissues and presenting micrometastases in two lymph nodes without extracapsular spread. We conducted a literature review, with only 24 cases reported. There are two theories explaining the aetiology of papillary carcinoma in thyroglossal cysts: the presence of residual thyroid tissue within the cyst and metastasis from a primary thyroid tumour. In our case, the carcinoma originated from residual thyroid tissue as no occult carcinoma was found in the thyroid gland.