Thyroglossal duct cysts are the most common form of congenital neck cysts. The incidence of thyroid papillary carcinoma in thyroglossal duct cyst is less than 1%. In most cases, the diagnosis is made postoperatively. We present a 52-year-old male with sonographically confirmed thyroglossal duct cyst with a large dystrophic calcification in the midline just cranial to the thyroid isthmus, which showed suspicious atypical cells in fine needle aspiration cytology. However, clinically and by contrast enhanced computed tomography neck, it was free from its adjacent tissues with no lymph node involvement. Various treatment modalities were reviewed to formulate a plan of treatment for further management of the patient. Some studies considered near total thyroidectomy as treatment of choice, whereas others categorised the patients into groups according to the risk factors involved and suggested Sistrunk's operation with follow up as the treatment modality in the low-risk group. Present case belonged to low-risk group and so underwent Sistrunk's operation. Histopathology revealed lesion to be encapsulated papillary thyroid carcinoma. The patient has been on regular follow- up for the last 3 months with no radiological or clinical recurrence.