We report the case of a 52-year-old man with papillary adenocarcinoma arising in placentoid bullous lesion of the lung, which is a rare cystic lung disease. Macroscopically, the cyst contained a soft villous tumor closely resembling the placental chorionic villi of early gestation. Histologic examination revealed the tumor to be papillary adenocarcinoma with an abundant stromal core, which comprised vascular and lymphatic vessels, lymphocytes, fat cells, and smooth muscle. Immunohistochemically, adenocarcinoma cells were positive for CAM 5.2, epithelial membrane antigen, and PE10 (antisurfactant apoprotein A antibody). These results indicate that the adenocarcinoma was derived from the component epithelial cells of the cyst. Based on the tumor's macroscopic and microscopic appearance and on the results of the immunohistochemical studies, we conclude that the cystic tumor in our case arose in a placentoid bullous lesion of the lung.