A 52-year-old woman underwent thoracotomy for the removal of a mass in the middle lobe of the right lung. Light microscopy showed a tumour with the morphology of a papillary adenocarcinoma with numerous psammoma bodies. Electron microscopy revealed the tumour cells to possess the lamellated intracytoplasmic inclusions characteristic of normal and neoplastic type II pneumocytes. Psammoma bodies have not previously been reported in type II cell carcinoma of the lung. Alveolar cell carcinoma should be considered in the differential diagnosis of a papillary adenocarcinoma with psammoma bodies occurring in the lung.