Scientists are struggling to explain the bright "transient feature" but say it could be waves, bubbles or buoyant solid matter.
The object was spotted on images of Ligeia Mare, Titan's second-largest sea, captured by the Cassini space probe which has been exploring the Saturnian system since 2004. Prior to July 2013 the sea had appeared flat and devoid of features, including waves. Then the enigmatic object, since dubbed "magic island", materialised - only to vanish again - in images.
Planetary scientist Jason Hofgartner, from Cornell University in New York City, said: "This discovery tells us the liquids in Titan's northern hemisphere are not simply stagnant and unchanging. We don't know precisely what caused this 'magic island' to appear, but we'd like to study it further."
Titan is the only planetary body in the Solar System besides Earth known to have large expanses of liquid on its surface. But unlike on Earth, they do not consist of water. Titan's seas are formed by flowing rivers of liquid methane and ethane - the material used in lighter ful. Details of the discovery are published in the journal Nature Geoscience.
Astronomers think the strange feature may arise from changing seasons. The main theories are winds kicking up and forming waves, pictured as a kind of "ghost" island in the radar images, bubbles formed by gases pushing out from the sea floor, and floating or suspended solids.
"Likely, several different processes - such as wind, rain and tides - might affect the methane and ethane lakes on Titan," said Mr Hofgartner. "We want to see the similarities and differences from geological processes that occur here on Earth.
"Ultimately, it will help us to understand better our own liquid environments."