A case of coexistent papillary and anaplastic carcinoma of the thyroid is presented. The diagnosis of papillary carcinoma was made by fine-needle aspiration biopsy (FNAB); however, it did not correspond to the aggressive clinical behavior of the tumor. Subsequent biopsies revealed anaplastic carcinoma in the thyroid and pretracheal tissue. This case most likely represents anaplastic transformation in a pre-existing papillary carcinoma. The limitations of diagnosing this entity by FNAB as well as some possible solutions are discussed.