Background Cytological examination of pleural fluid has good specificity, but imperfect sensitivity for the diagnosis of malignant pleural effusion (MPE). Published estimates of sensitivity vary and predictors of false negative cytology are not well established. Aims To estimate pleural fluid cytology sensitivity and identify risk factors for false negative cytology. Methods We conducted a retrospective cohort study of patients who had cytology testing of pleural fluid at Christchurch Hospital, New Zealand, from July 2017 to October 2019. Data on clinical and pleural fluid characteristics were collected. MPE was defined by positive pleural fluid cytology, tissue histology or multidisciplinary meeting consensus. We estimated sensitivity of the first pleural cytology assessment. We performed multivariate logistic regression to ascertain patient groups at greatest risk of false negative results. Results Initial pleural fluid cytology was diagnostic in 117 of 156 patients, providing a sensitivity (95% confidence interval (CI)) of 75.0% (67.4–81.6%). The sensitivity was 79.0% (66.8–88.3%) for lung cancer, 91.3% (72.0–98.9%) for breast cancer and 33.3% (95% CI 11.8–61.6%) for mesothelioma. Cloudy appearance of pleural fluid (odds ratio (OR) 0.12; 95% CI 0.03–0.54) and yellow/gold pleural fluid (OR 0.24; 95% CI 0.06–0.96) reduced the odds of false negative pleural cytology. Pleural thickening on computed tomography scan (OR 3.3; 95% CI 1.2–9.4) was a risk factor for false negative cytology. Conclusion Sensitivity of pleural fluid cytology was greatest in primary lung and breast cancer, and lowest in mesothelioma. Clinicians should be alert to false negative results when suspecting mesothelioma or if pleural thickening is present.