Congenital cystic adenomatoid malformation (CCAM) of lung is a rare condition with the potential for malignant transformation. We report a patient who underwent lobectomy for a cystic lung lesion, which was found to be a type 1 CCAM associated with a mucinous bronchioloalveolar carcinoma. Retrospective review of a biopsy specimen from the same lobe excised during an ipsilateral empyema drainage 11 years previously showed similar foci of bronchioloalveolar carcinoma. The patient remains well 3 years after surgery. This case demonstrates the indolent nature of malignancies seen in association with type 1 CCAMs and also that complete excision, probably by lobectomy, is the treatment of choice to avoid recurrence.