Hydatid liver disease is commonly found in sheep farming areas. Hydatid cysts are confined to the liver and lungs in common. Many reports on hydatid cysts of liver and lungs were reported individually. Here, we report a case of hydatid cyst of the liver leading to the development of cysts in the lungs. The patient had previously underwent surgery for the removal of hydatid cysts in the liver but chemotherapy with albendazole was neither initiated immediately nor continued for 3 to 6 weeks after initiation. Later she presented with shortness of breath and cough along with fever and chills, for which she was diagnosed to have pleural effusion confirmed with pleural fluid analysis showing increase in ADA (Adenosine deaminase) and protein levels and USG (Ultrasonography) demonstrating loculations. Inspite of specific therapy, pleural effusion was not relieved and she was advised for CT chest which revealed multiple cysts in the lung. Suspecting for the liver cysts, USG abdomen was advised and it confirmed the presence of hydatid cysts in the liver. This helped to draw a conclusion that failure of earlier surgical intervention i.e excision of hydatid cyst of the liver lead to the development of cyst in the lungs that presented as pleural effusion. This case highlights the importance of chemotherapy along with surgical intervention before and after the surgery.