A hat assembly including a hat that is selectively disposed in either a collapsed position or an expanded position is shown. The hat comprises a head engaging portion including a side wall, a crown and a brim. The brim has a substantially annular configuration at least partially defined by a central opening and an outer periphery having a continuous, substantially circular configuration. The side wall have an inner end being of substantially equal dimension as a circumference of the central opening and the inner end is secured continuously to the circumference along mutual lengths thereof. Breathing holes may be formed in the side walls to prevent sweating or perspiration on the head of a wearer. The hat has an expanded position and a collapsed position wherein the crown is structured to be folded into and out of the interior of the hat. A method of selectively disposing a hat in a hat assembly in either a collapsed position or an expanded position is also shown.