Drug-coated balloons (DCBs) have been proposed as a viable alternative to drug-eluting stents (DES) for managing chronic total occlusion (CTO), reducing adverse reactions associated with DES. However, adverse events after DCB treatment are rarely reported. We present a case of coronary artery aneurysm (CAA) formation after DCB treatment. A 55-year-old active smoker presented with exertional chest pain and positive ischemic response on the exercise stress test. Diagnostic coronary angiography revealed CTO in the mid-left anterior descending (mid-LAD) coronary artery with collateral circulation arising from the contralateral side. The patient underwent DCB treatment using a paclitaxel-coated balloon after predilatation with a noncutting balloon and a semi-compliant balloon. The final angiogram showed minimal recoil, type B coronary dissection nonflow limiting, and thrombolysis in myocardial infarction (TIMI) grade 3 flow. A follow-up coronary angiogram at 6 months revealed a fusiform aneurysm at the treated lesion with DCB. Despite the asymptomatic nature of the patient, good distal flow in the LAD, and the patient achieving a TIMI grade 3 flow, a decision was made to observe and closely monitor the patient. Despite potential risks, DCB remains a viable alternative to DES in CTO cases. Our case suggests that, although CAA occurred, it did not lead to significant adverse cardiac events. Further research is needed to understand the predictors and long-term outcomes of CAA.