Hydatid disease is an infectious disease caused by the larval stage of the parasitic tapeworm Echinococcosis granulosus. Its distribution is worldwide. Although hydatid disease can develop in almost any part of the body, it is most commonly found in the liver and lung. Musculoskeletal involvement is rare. The radiological appearance of the hydatid disease of musculoskeletal system mimics tumors and other inflammatory conditions. Therefore preoperative diagnosis of musculoskeletal hydatid disease is sometimes difficult clinically and radiologically. On radiography, different radiographic changes may occur. In cases of osteolytic and inflammatory changes, it may mimic any variant of nonspecific or specific osteomyelitis. Bone erosion and destruction may lead to almost complete osteolysis, bone may distort, and on occasion, its radiologic appearances may be confused with those of a malignant bone tumor. Computed tomography (CT) is more accurate in delineating the area of destruction. The primary role of CT and magnetic resonance imaging is in the recognition of extraosseous spread of the hydatid disease within the soft tissues. This article reviews the pathological basis and the clinical and imaging features of musculoskeletal hydatid disease.