Purpose: Adenomyoepithelioma (AME) are uncommon breast lesions characterized by biphasic epithelial-myoepithelial lesions with benign to low malignant potential. Radiological resemblance to a range of breast conditions and morphologic heterogeneity in limited biopsy samples pose a diagnostic dilemma. Methodology: Systematic review was conducted by entering search terms “adenomyoepithelioma” and “breast” in the Pubmed Database. This resulted in 174 publications with only 19 describing “atypical adenomyoepithelioma”. We report a case of a 67-year-old lady presenting with an indeterminate left breast nodule. Core biopsy revealed chronically inflamed cyst. Interval imaging at 5 months showed increase in lesion size by 2cm, cystic fluid reaccumulation and development of an irregular thick wall. Repeat core biopsy and FNAC revealed intraductal papilloma and hemorrhagic cyst contents with atypical cells. Excision biopsy was done to exclude possible encysted papillary carcinoma. Results: Excisional histologic findings disclosed a dual population morphology, overgrowth of one epithelial component, and mitotic count of 4-8/10HPFs (Ki67 >10%) along with positivity to immunohistochemical markers (CK7, AE1/3, MNF116, p63, calponin, SMMHC and caldesmon). Histological conclusion was atypical AME. Patient remains recurrence-free after 2 years. Conclusion: Atypical AMEs are rare lesions displaying cytological atypia but lack features of malignant AMEs. Biologic behaviour of these tumours is not well-established. AME is challenging to recognize on imaging and core biopsy. Accurate histological assessment through excisional biopsy is important to guide appropriate management. Complete excision is recommended to avoid local recurrence.