Intravesical Bacillus Calmette-Guérin (BCG) is an important treatment for the management of non-muscle invasive bladder cancer because of its proven efficacy and favourable safety profile. The most common complications associated with BCG treatment are relatively minor. They include urinary frequency, cystitis, fever, and hematuria. Although serious complications are rare, patients can develop severe, life-threatening sepsis with disseminated mycobacterial infection. We report a rare case of periurethral diverticulum formation after intravesical BCG and review the literature on the potential complications of this treatment modality.