Thyroid nodules are often encountered in clinical practice and are a common clinical dilemma. Although the vast majority are benign lesions, a small proportion are malignant. A thorough and cost-effective approach is important in the evaluation of thyroid nodules to pick the very few malignant thyroid nodules from the many benign ones inorder to plan appropriate management of these patients. Most commonly a high frequency and resolution ultrasound is performed to confirm the presence of a nodule, and assess the status of the whole gland. It is useful for evaluation of thyroid nodules because of its safety, non-invasiveness, non-radioactivity, and effectiveness. Also, it can be used to assist the placement of the needle within the nodule during fine needle aspiration cytology, especially in clinically occult nodules. Objective: The aim of this study was to assess the role of ultrasonography in the evaluation of thyroid nodules by comparing the sonographic and cytological findings. Methodology: It was a Hospital based Prospective blind comparison of the diagnostic test (Thyroid Ultrasonography) and the standard test (Cytology), conducted for a period of six months from March to August 2009. A total of 60 patients having thyroid nodules (diagnosed sonographically) were selected who underwent thyroid ultrasonography and ultrasound guided fine needle aspiration cytology. Results: Majority of the patients were females (85.0%) and the female to male ratio was 3.4:1, majority being in the age group 25 to 49 years. Approximately, a quarter of the examined patients had previous exposure to ionizing radiation. Sonographically, 6.7% malignant thyroid nodules were detected. The magnitude of thyroid malignancy as detected by cytology was 8.3%. The sensitivity, specificity, accuracy and positive predictive value of thyroid ultrasonography was 60%, 98.2%, 95% and 75.0% respectively. Similarly, thyroid nodular margins, echogenicity, presence/absence of ‘halo’ and the pattern of color flow within the nodules had high sensitivity, specificity, predictive values and accuracy in characterizing thyroid nodules into benign and malignant. Discussion: In the studied patients, female predominance and high female to male ratio tallied well with the high female to male ratios seen in previous studies. The difference of prevalence of thyroid malignancy as detected by the two techniques can be due to the goldstandardness and more accuracy of cytology in diagnosing pathologies as compared to ultrasonography. The overall sensitivity, specificity, accuracy and positive predictive value of thyroid ultrasonography as well as of individual features was high and in line to previous studies. Conclusion and recommendations: Based on the sensitivity, specificity and accuracy in characterizing thyroid nodules, and the possibility of few appearing malignant, thyroid ultrasonography should be used in the evaluation of a thyroid nodule inorder to discover potential thyroid cancer from the many benign ones and, thus, to identify those patients for whom surgical excision is genuinely indicated. This detection and distinction can reliably be achieved by high frequency thyroid ultrasonography. However, thyroid ultrasonography cannot replace fine needle aspiration cytology in the evaluation of thyroid nodules.