Bile duct cysts are rare and of uncertain origin. Most have been reported in young females of Asian Descent. The long term complication of choledochal cysts includes malignant transformation in the epithelial lining of biliary tree. Histopathologically it is Cholangiocarcinoma in the majority of cases with poor long-term prognosis. However, Rhabdomyosarcoma associated with choledochal cyst in an adult is rarely reported before. The authors report one such case in an adult female patient who presented to us with features of obstructive jaundice.