Localized cystic kidney disease (LCKD) is a distinct renal disorder characterized by the presence of cysts within specific regions of the kidneys. We present a rare case of a 41-year-old African American man, who presented to our medical center with lower urinary tract symptoms and gross hematuria. The initial assessment culminated in the identification of an uncomplicated urinary tract infection, prompting the prescription of appropriate oral antibiotic therapy. On follow-up after 5 months, the patient presented with gross hematuria. Imaging studies revealed a mixed-density cystic lesion of 2.6 cm situated within the interpolar region of the right kidney. This cystic lesion exhibited intricate septations at the superior pole of the kidney. Robotic-assisted right partial nephrectomy was performed, and pathologic examination was diagnostic for LCKD. This report not only underscores the uniqueness of LCKD but also presents a comprehensive review of the existing literature that pertains to this condition. Particular emphasis is placed upon its inherent benign behavior and its marked divergence from the progressive trajectory commonly associated with other renal diseases. We also explored the incidental findings of the disease, its diverse clinical symptomatology, conceivable etiological underpinnings, and the array of diagnostic modalities used. Finally, similarities in histopathologic findings with polycystic kidney disease and other entities are discussed, underscoring the importance of accurate diagnosis and management.