A 30-year-old male presented with fever and dyspnea for 2 weeks. Apart from pallor, there were no other physical findings. Complete blood count showed hemoglobin 57 g/L, white cell count 13 × 109/L, and platelet count 22 × 109/L. Peripheral blood smear showed 34% blast cells and dysplastic granulocytes exhibiting reduced granulation and pseudo–Pelger-Huet neutrophils (red arrows; panels B and C). Auer rods were confirmed not only in the blast cell (blue arrows; panels B and C) but also within the dysplastic granulocyte (black arrow; panel A). Bone marrow was a dry tap, whereas the trephine section revealed diffuse infiltration with blast cells. Peripheral blood immunophenotyping by flow cytometry showed CD34+ blast cells expressing the myeloid markers CD13, CD33, CD117, and MPO and absence of B- and T-cell markers. Conventional cytogenetic studies showed a loss of the Y chromosome in all karyotyped cells. Based on these findings, diagnosis of acute myeloid leukemia (AML) was made. The patient received induction chemotherapy with daunorubicin/cytarabine (7+3) and showed good clearance of blast cells on his day 14 marrow aspirate. This is a rare and unique case of AML with the characteristic presence of Auer rods in myeloblast and dysplastic granulocyte in association with loss of the Y chromosome. The loss of the Y chromosome is widely reported in myeloid malignancies, whereas presence of Auer rods in mature and dysplastic granulocytes is rare and has been described in AML with maturation [t(8;21)]. Presence of Auer rods in AML is associated with good prognosis, whereas its significance in dysplastic granulocyte has yet to be determined.