Yolk sac tumors (endodermal sinus tumors) are an important subgroup of germ cell tumors of the ovary. They are seen in young females and are highly aggressive, but respond well to treatment. Although different morphological patterns can be seen on light microscopy, granulomatous reaction and giant cells are a very rare occurrence. We report the case of a young female with ovarian yolk-sac tumor in which a widespread granulomatous reaction was seen, causing a diagnostic dilemma.