Neonatal umbilical anomalies usually represent remains of the vitelline duct or the allantois. We describe a case of an umbilical appendix in a neonate. The vermiform appendix was found to be positioned in the umbilical cord. In a brief literature review we found eight other reports concerning umbilical appendices. In this article we describe a possible embryological explanation for the development of an umbilical appendix, and discuss whether or not the appendiceal umbilical fistulae reported are congenital or iatrogenic. The possible association between an umbilical appendix and different forms of malpositioning and rotation of the gut is also discussed. Protrusion of the neonatal appendix into the umbilical cord represents a different entity of congenital anomalies. It is important to realize that, in the case of an unrecognized umbilical appendix, medical procedures (e.g., canulation or clamping of the umbilicus) may produce an iatrogenic appendico-umbilical fistula. Careful inspection and palpation of the umbilical cord prior to these procedures may prevent a fistula being created. Furthermore, because the possible association between umbilical appendices and different kinds of malpositioning of the gut is so far not wholly elucidated, we recommend further (radiological) investigation in each case of an umbilical appendix. Correct positioning of the bowel needs to be confirmed in order to rule out possible future complications.