Placental transmogrification of the lung (PTL) is a rare, benign cystic disease of the lung, first described in 1979, that occurs in association with bullous emphysema and involves a single lobe of the lung. Few cases have been reported in the medical literature. Macroscopic and histologic findings of the disease resemble those of placental villi. The pathogenesis of PTL is unknown. Most authors believe that the condition develops from or is a reaction to emphysema. Some suggest that the lesion is related to a lymphatic or vascular abnormality in emphysematous lung parenchyma. An association of the disease with pulmonary fibrochondromatous hamartomas and other pulmonary diseases has been reported. The presentation of the disease is variable and it ranges from asymptomatic to varying degrees of respiratory ailments including respiratory distress in the extreme cases. Rarely this lesion has been discovered incidentally on radiography or CT scan. Surgical resection is the usual curative treatment. The authors report the case of a 36-year-old man with a giant bulla of the upper lobe of the right lung. Microscopic examination of the resected specimen revealed the typical histologic features of placental transmogrification. The patient was assessed with quantitative perfusion lung scintigraphy both before and after lung volume reduction surgery.