Carbimazole is a commonly used antithyroid drug in thyrotoxicosis. It is generally well tolerated, and its side effects include allergic skin reactions, gastrointestinal upset, agranulocytosis, and hepatotoxicity. Hepatitis is a rare but serious side effect. Here we report a case of carbimazole-induced hepatitis with severe cholestasis that was managed by switching to propylthiouracil. Most of the literature recommends radioiodine or surgery as the definitive treatment for hyperthyroidism in thionamide-induced hepatitis rather than switching to other thionamide. However, substitution of one thionamide for another can be tried as we did in this case, without any increased risk of hepatotoxicity as the mechanism of liver injury differs in both groups. A previously healthy 30-year-old lady who was diagnosed with thyrotoxicosis one month earlier that was treated with carbimazole 60 mg daily was admitted to the medical ward with yellowish discoloration of sclera, urine, and pruritus of one-week duration. Systemic examination was unremarkable except for icterus. Investigation showed hyperbilirubinemia and elevated liver enzymes. A probable diagnosis of carbimazole-induced cholestatic hepatitis was made and the drug was discontinued. Other causes of hepatitis and cholestasis were excluded. Attempts to arrange radioiodine or treat the patient surgically were not successful. She was continued on propranolol and later started on steroids and propylthiouracil. The patient's liver function tests (LFTs) started improving gradually. On follow-up, LFTs normalized at four weeks and thyroid function tests (TFTs) showed signs of improvement. The patient was followed up for six months after discharge and was doing well clinically on follow-up; her repeat TFT and LFT were completely normal. Carbimazole-induced hepatitis is exceedingly rare; however, it should be considered in patients with jaundice and thyrotoxicosis. Despite reports of cross-reactivity of the two available antithyroid drugs, switching from carbimazole to propylthiouracil and steroid therapy may be an option if other options of definitive therapy could not be arranged or are contraindicated.