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Arnold-Chiari type III malformation constitutes the rarest type of all the Chiari malformations. This extremely rare congenital anomaly shows poor prognosis and results in either early death or development of various severe neurologic deficits in the surviving patients. It is characterized by the herniation of hindbrain contents into an encephalocele sac through a bony defect located in the upper cervical or lower occipital region. Magnetic resonance imaging (MRI) is the preferred imaging modality in the diagnosis of this rare congenital anomaly, especially due to its multiplanar capability. In this case report, we described the imaging findings of Arnold-Chiari type III malformation in a newborn male infant. He presented with two huge encephalocele sacs containing dysplastic brain tissues in the upper cervical and lower occipital regions together with various findings related to the disease. Following a right-sided shunt insertion for hydrocephalus treatment, he has undergone a surgical procedure ensuring removal of the encephalocele sacs with primary closure of the bony defects.