Although nuclear immunostaining for paired box protein (PAX5) is widely used in practice, its cytoplasmic localization has not been evaluated. Recently we encountered cytoplasmic granular PAX5 staining in rectal well-differentiated neuroendocrine tumor (WD-NET) in the absence of nuclear staining. We investigated the specificity of this staining pattern for rectal NET (n=21) in comparison with 108 NETs, 1 WD rectal NET with elevated proliferation (WD-NET G3), and 40 poorly differentiated neuroendocrine carcinomas from the gastrointestinal and pancreatobiliary tract and liver. Representative tumor sections were subject to immunohistochemical stain for PAX5 antibody. Immunohistochemistry for 3 L-cell markers, glucagon-like peptide 1 and 2, and peptide YY, was performed on all rectal and appendiceal NETs and all other NETs with cytoplasmic PAX5 staining. Cytoplasmic PAX5 staining was observed in 90% (19/21) of rectal NET, 27% (3/11) of appendiceal, 14% (2/14) of pancreatic, 7% (2/29) of lung, 25% (3/12) metastatic NET in the liver, and 100% (1/1) of renal NET. No PAX5 cytoplasmic staining was seen in all grades of NET in other organs, rectal WD-NET G3, and all neuroendocrine carcinoma. L-cell marker staining was observed in all 21 (100%) rectal, in 3 of 3 (100%) PAX5-positive, and 1 of 7 (14%) PAX5-negative appendiceal NET. Cytoplasmic PAX5 staining is specific for rectal carcinoids. The sensitivity and specificity of PAX5 to detect L-cell type rectal carcinoids is 90% (19/21) and 100% (21/21), respectively. Cytoplasmic localization of the PAX5 protein may be utilized as a surrogate marker to detect L-cell type rectal carcinoids.