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Choledochal cyst is a cystic dilation of the biliary tree that can increase the risk of malignancy in bile ducts and the gallbladder. These are usually lined by bile duct epithelium, which may undergo intestinal and squamous metaplasia. This is the first report of clinically diagnosed type II choledochal cyst that is entirely lined by metaplastic stratified squamous epithelium, unlike most other cysts, which are histologically lined by bile duct epithelium. This observation can potentially explain the underlying pathogenic mechanism of rare reports of squamous cell carcinomas arising in bile duct systems.