Nipple discharge is the third most common breast complaint after breast pain and breast mass, most commonly associated with endocrine alterations and/or medications, pregnancy, lactation, post lactation, fibrocystic disease, intraductal papilloma, duct ectasia, nipple adenoma, infection, chronic mastitis, subareolar abscess, and least frequently, breast carcinoma. Cytological examination of nipple discharge (ND) is a noninvasive method of diagnosing the underlying breast pathology. We report a 46 year old female, who presented with pain and blood-mixed ND from the right breast with an impalpable mass. Cytological examination of the discharge was done and diagnosis of papillary neoplasm with degeneration, metaplasia, and atypia was given, which was further confirmed on histology and positive IHC for HMWCK and p63. Final diagnosis was intraductal papilloma of the lactiferous duct with squamous metaplasia and infarction. Differentiating benign papilloma from a carcinoma is challenging to the cytopathologist and requires clinicopathological correlation and a good knowledge of cytology.