Chordoma is a relatively rare locally invasive and potentially malignant tumor of fetal notochord origin, affecting the axial skeleton. Cytopathological diagnosis of chordoma is favored by the presence of characteristic physaliphorous cells, bearing abundant foamy cytoplasm dispersed in a myxoid matrix. Anaplastic chordoma or dedifferentiated chordoma, an even rarer variant, can cause a diagnostic confusion with chondrosarcoma from the cytopathological point of view, with similar chondromyxoid matrix and atypical cells. Hence, chordoma bearing anaplastic features needs to be identified and should be distinguished from chondrosarcoma on aspiration cytopathology. We present a case of anaplastic sacral chordoma in a man 59 years of age, causing extensive destruction of sacrum and invading the paravertebral tissues as evidenced by radiology. Fine needle aspiration cytopathology revealed few large pleomorphic hyperchromatic cells, admixed with characteristic physaliphorous cells and myxoid matrix. The cytopathological diagnosis has been confirmed by histopathology and immunohistochemistry. Since anaplastic chordoma bears an unfavorable prognosis, it should be suspected on preoperative aspiration cytopathology. Clinicoradiological correlation along with histopathological and immunohistochemical confirmation is necessary subsequently.