We report a case of xanthogranulomatous cystitis that developed in a patient with a history of colon cancer. While undergoing adjuvant chemotherapy with fluorouracil and levamisole, rising carcinoembryonic antigen (CEA) levels and the appearance of a pelvic mass, suspicious for recurrent cancer, were identified. Exploratory laparotomy demonstrated the presence of a benign condition of the bladder, xanthogranulomatous cystitis, which was resected by partial cystectomy. CEA levels have normalized. This is the first reported case of xanthogranulomatous cystitis producing an elevated CEA level.