Adenomyoma or adenomyomatosis (ADM) of the gallbladder generally carries little or no risk of malignant transformation. Rare cases of such malignant transformation are described in the literature only in segmental type of ADM and not in localized adenomyoma. We report a case of a 58-year-old asymptomatic woman found to have an incidental 3.3 × 3.2 × 2.3 cm well-circumscribed exophytic mass on surveillance ultrasound, originating from the fundus of the gallbladder and abutting the liver capsule. The patient underwent an open cholecystectomy with resection of the mass and underlying segment of the liver. The mass was discrete and well-circumscribed with a peripheral pseudocapsule. Histologically, it showed features typical of a benign adenomyoma with variably sized distended microcysts within fibromuscular stroma. Within the lesion, however, multiple small foci amounting to approximately 5% of the total lesion showed high-grade dysplasia or adenocarcinoma in situ. Apart from cytological distinctiveness, these foci were also selectively highlighted by positive immunostaining for p53 and higher Ki-67 reactivity. Away from this lesion, the gallbladder showed cholelithiasis, mild cholecystitis, and no additional adenomyoma. There was no invasion into the gallbladder mucosa or adjacent liver. This case is highly unusual since transformation to carcinoma is not previously described in a localized or discrete adenomyoma. In the short available follow-up (4 months to date), there is no evidence of recurrence or metastasis. The long-term prognosis is expected to be favorable due to lack of invasion and complete excision, even if there is no documented literature regarding its course.