A case of congenital cystic disease of middle and lower lobe of right lung in premature female infant delivered at 8 months of gestation is reported. The congenital cystic disease is relatively rare malformation. Hydramnios and anasarca in the newborn infant were present and the cysts were lined by bronchial epithelium. These clinicopathological findings are compatible with that of the case reported by Ch’in and Tang in 1949. Embryologically the condition is of the nature of a malformation which starts when lung anlage had already undergone lobulation but cartilage, arteries, mucous glands and alveoli are not yet differentiated.