Pancreatic pseudocysts are seen both in acute and chronic pancreatitis. Prevalence of pancreatic pseudocyst in chronic pancreatitis is 20% to 40% and is most commonly seen in alcoholic chronic pancreatitis. Intracystic hemorrhage from a pseudoaneurysm is a rare and potentially a lethal complication of pancreatic pseudocyst with an incidence of less than 10%. We herein present a case of a 42-year-old male with a past medical history of chronic alcoholic pancreatitis, stable pseudocyst in the tail of pancreas, alcohol abuse and seizures who presented with abdominal pain and acute anemia had this rare complication of hemorrhagic pseudocyst. The diagnostic modalities used to diagnose hemorrhagic pseudocyst are ultrasound with color doppler, CT with contrast, digital subtraction angiography and angiography. Angiographic embolization of the culprit artery is the preferred treatment of choice in the treatment of pseudoaneurysms. It is important for early recognition and treatment of this complication as the mortality can be as high as 40%.