Xanthogranulomatous cystitis (XC) is a rare benign chronic inflammatory disease of unknown etiology. We report a patient of XC managed with long-term antibiotics and augmentation cystoplasty. A 50-year-old man presented with urgency, frequency, hematuria and lower abdominal pain. Investigations revealed small capacity bladder with diverticula and cystoscopy showed inflamed bladder with multiple small polypoidal growth that had histological findings suggestive of XC on biopsy. Patient was treated with augmentation cystoplasty and prolonged administration of broad-spectrum antibiotics. Postoperative course was uneventful and patient remains asymptomatic at 1-year follow-up. XC is rare entity of unknown etiology. Patients may be given a trial of long-term broad-spectrum antibiotics.