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This paper contributes to the on-going interest within organizational communication in how an organization’s identity and culture are influenced by its organizational image. The case study of an European Railway Service illustrates that extensive negative media attention damage the organizational image and identity resulting in a paranoid culture. Based on interviews with 10 ticket conductors, observations from management meetings, written internal communication material and press material the paper discuss the dilemmas, contradictions and possible benefits related to being a paranoid organization. The findings suggest that the organizational paranoia has benefit on a short-term basis, however it paralyzes the organization and prevent it from moving towards a more positive identity in the future.