Background: Chromosomal instability (CI) is critical for carcinogenesis. The morphological markers of CI include multipolar mitosis (MPM), chromatin bridge (CB), micronuclei (MN), and nuclear bud (NB). These represent an underlying genetic instability and can be studied in routine cytological specimens. The aim of this study was to evaluate the significance of morphological markers of CI in differentiating malignant and benign effusion smears. Materials and Methods: In this retrospective observational pilot study, 25 cases of benign and 25 cases of malignant effusion smears were selected. All of the malignant cases were reconfirmed by histopathology for primary sites. One thousand cells in May–Grunwald–Giemsa-stained smears were counted for MPM, CB, MN, and NB. The significance of these markers of CI was compared between the benign and malignant cases. Results: The mean numbers of MPM, CB, MN, and NB in malignant cases were 10.52, 7.72, 1.36, and 0.40 per 1000 cells counted, compared to 0.7, 0.5, 0.3, and 0 per 1000 cells counted in benign cases, respectively. The Student's t-test showed highly significant differences between the benign and malignant effusion smears for the CI markers, with P < 0.000001, < 0.000001, and <0.00001 for MN, NB, and MPM, respectively. Conclusion: There were significant differences in the scores of morphological markers of CI in cytological smears between malignant and benign effusions. This is a convenient and reliable method to differentiate between malignant and benign effusions and can be used in conjunction with cytomorphology if a larger study is able to establish the significance in effusions.