We describe a Paneth cell carcinoma arising within the ampulla of Vater in a 64-year-old man. The phenotype of virtually all neoplastic cells was consistent with that of Paneth cells, based on routine morphology and their strong positive immunostaining for lysozyme. Additional widespread positive immunostaining for carcinoembryonic antigen and CA 19.9 supports a totipotential cell as the origin of such neoplastic cells. This case, therefore, represents a true Paneth cell carcinoma, as opposed to inclusion of occasional neoplastic Paneth cells into a poorly differentiated adenocarcinoma. This pattern of differentiation is rare, and predictions regarding its ultimate biological behavior and malignant potential must be guarded.