Although severe congenital cystic changes (CCC) of the lung may be fatal, less severe forms may regress or vanish spontaneously. With recent advances in sonography, asymptomatic CCC are increasingly found. Whether all CCC should be promptly excised, or not, is uncertain. Congenital cystic changes conceptually are bronchopulmonary foregut malformations (BPFM) with a predilection for malignant degeneration. Among all BPFM, congenital cystic adenomatoid malformation (CCAM) is most common. We therefore searched for evidence of early malignant transformation in five surgically excised and three autopsy lungs with CCAM. By light microscopy, CCAM resembled poorly formed and dilated bronchi, bronchioles and respiratory air spaces. Four lungs had multiple nodular aggregates of mucus producing cells; the glandular component (GC). By scanning electron microscopy, GC appeared as multiple micropolyps, resembling neuroepithelial bodies. By transmission electron microscopy, GC had a surface proliferation of cells with granules of the mucous type and a basal increase in cells with owl-eyed neuroendocrine granules. The glandular component in CCAM appeared similar to the mucous cells in hyperplastic polyps of the colon and a type of mucus producing bronchioloalveolar carcinoma. Our findings support the hypothesis that CCAM is caused by dysregulated paracrine growth of mature cells and extracellular matrices and that GC could have the potential for malignant transformation. Further clinical and laboratory studies of BPFM are needed for the appropriate management of congenital cystic changes.