Septate lacrimal sac diverticula are uncommon and can present with acute dacryocystitis. Their management can pose surgical challenges. A boy, aged 5 years, presented with swelling of the inner side of right lower lid with epiphora of 1-year duration with an acute pain of 2-days duration (Fig.A). There was a history of 2 such episodes of pain and redness; however, there was no history of trauma, discharge, or surgical interventions. Clinical examination showed a tender multilobulated, firm lesion on palpation. Ocular examination was normal. CT scan showed a hypodense and homogenous mass with multiple, well-defined internal septae, involving the medial lower lid and bony lacrimal fossa (Fig.B). The lesion also appeared to be in contiguity with the lacrimal sac and upper nasolacrimal duct without a clear plane of distinction (Fig.C). An impression of a possible lacrimal sac diverticulitis with multiple internal septae was made. Patient was started on conservative treatment to reduce inflammation, and a surgical exploration was planned. Lacrimal irrigation was suggestive of a right nasolacrimal duct obstruction while the left side was patent. Surgical exploration revealed the lesion to be a multilobulated dermoid cyst with focal areas of keratin leak (Fig.D). The medial aspect of the lesion was adherent to the lateral walls of lacrimal sac and upper nasolacrimal duct (Fig.E). The lesion was carefully separated along with the adherent perilacrimal fascia (Fig.F). Post excision, the lacrimal drainage irrigation was freely patent. The adherent nature of the dermoid cyst with the wall of lacrimal sac could be secondary to inflammation and hence appeared contiguous on imaging. This case demonstrates the differential diagnosis of a septate lacrimal fossa lesion, and both possibilities should be kept in mind when approaching such presentations.