We present a unique case of papillary endothelial hyperplasia arising in the urethra of a female patient. This was an incidental finding in our patient, who was hospitalized for diarrhea and dehydration. The gross and histologic features of papillary endothelial hyperplasia are reviewed. This entity is essentially an organizing thrombus with prominent endothelial hyperplasia. The most important diagnostic consideration is distinguishing this benign lesion from angiosarcoma. Other entities in the differential diagnosis of urethral lesions are also briefly reviewed.