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Craniopharyngiomas are histologically and cytologically benign epithelial tumors of the central nervous system that may be locally aggressive and tend to recur after excision. Malignant change in craniopharyngiomas is extremely rare; we found only 4 such reports in the literature. In this report, we describe a case of squamous cell carcinoma arising in a previously benign craniopharyngioma in a 42-year-old woman. The patient was diagnosed with craniopharyngioma in 1982; during the subsequent 15 years she experienced 7 tumor recurrences, for which surgical resections and 3 courses of radiotherapy were performed. In 1998, the tumor recurred with involvement of the nasal cavity and sphenoid and ethmoid sinuses. Histologic evaluation revealed foci of typical adamantinomatous craniopharyngioma associated with a moderately differentiated squamous cell carcinoma. The transition of typical craniopharyngioma to squamous cell carcinoma was well demonstrated, suggesting that carcinoma arose from the underlying craniopharyngioma. Radiation may have been a contributing factor to carcinogenesis in this case.