Reported herein is a case of carcinoid tumor arising in a duplication cyst of the duodenum in a 34-year-old woman. Ultrasonography at a health check-up revealed a 10 cm cystic mass located in the retroperitoneum adjacent to the third portion of the duodenum. Macroscopically, it had a smooth surface without communication with other organs and was filled with brownish necrotic fluid. More than half of the inner wall was occupied by a white, irregular, and solid nodule, which protruded into the lumen. The nodule was diagnosed as a carcinoid tumor invasive to the deep muscular layer. The non-neoplastic cyst wall had bowel structures including mucosa, submucosa and double layers of smooth muscle, indicating that the lesion was a duodenal duplication cyst. Most of the mucosa was eroded by marked inflammation. The remaining mucosa consisted of various types of epithelium, the major type having the nature of primitive gastric mucosa. Of interest was the presence of hamartomatous components in the wall. Furthermore, the non-neoplastic mucosal lining cells around the carcinoid tumor expressed neuroendocrine antigens and had minimal proliferative activity, suggesting that part of the cyst wall provided a microenvironment for accelerated differentiation of epithelial cells to an endocrine phenotype and transformation to neoplasia.