A pilonidal cyst removal is a surgical procedure that involves the removal of a pilonidal cyst. Pilonidal cysts develop in the crease of the buttocks along the tailbone, and contain hair, skin, and other debris. The doctor makes a small incision on the skin near the cyst, removes the sac enclosing the cyst, and cleans the pocket. in a small sac located just above the buttocks on the tailbone.