What is a Pilonidal Cyst? A pilonidal cyst or sinus is an abscess (localized collection of pus) or a chronic draining sinus (canal or passage). These cysts develop when a dead hair or hairs are pushed into the skin forming a canal or passage. This sinus then becomes infected as more debris collects in the sinus. The most common place for a pilonidal cyst to develop is in the skin over the tailbone, just over the cleft in the buttocks.