Cystic dysplasia of the testis is a rare congenital anomaly. It presents a diagnostic challenge to the pediatrician and should be distinguished from malignant lesions. We herewith present a two-month-old boy who presented with right inguinal swelling. Detailed investigations including ultrasound and magnetic resonance imaging helped in establishing the diagnosis of cystic dysplasia. To the best of our knowledge, our case is the first case of cystic dysplasia of the rete testis in the literature, which presented as undescended testis (inguinal swelling), with no associated renal or ureteric anomalies.