A 36-year-old male patient, a known case of retroviral disease, presented with clinical features suggestive of pneumonia and was found to have bilateral lower zone lung consolidation which on resolution showed a cystic change on the chest radiograph. A subsequent CT scan revealed the true nature of these cysts to be ruptured pulmonary hydatid cysts showing a 'water lily sign'. The rare association of pulmonary hydatid cyst and HIV from India is described.