Lipoid pneumonia is a rare pulmonary disorder having no classical radiological appearance. We report a 33-year-old male, ex-smoker who was referred to us with history of cough, mild mucoid expectoration and progressively increasing dyspnoea since one year. He was investigated at local hospital and was treated with 30 mg prednisolone per day for 6 months for sarcoidosis without any response. On examination, he was normal except for fine basal crepitations in chest. Pulmonary function test (PFT) revealed mild airway obstruction. High resolution computerised tomographic scan (HRCT scan) revealed bilateral reticulonodular shadows and bronchiectasis in lower zones. Open lung biopsy revealed lipoid pneumonia. As there was no history of nasal distillation of oils, it was diagnosed to be idiopathic. The relevant literature is reviewed.