The treatment of colloid cysts remains controversial. This article reports on 18 patients with colloid cysts of the third ventricle who presented to the University of Michigan between January 1990 and June 1995. Two patients had conventional transcortical-transventricular approaches; the remaining 16 patients underwent a stereotactic modification of the transcortical approach, using a specially designed cylindrical retractor, for the resection of their colloid cysts. Minor morbidity and no mortality have been associated with this technique. There have been no instances of recurrence during the period of this report. The mean operative time for the two conventional craniotomies was 233 minutes, compared with 129 minutes for the stereotactic craniotomies. Our technique allows for a limited craniotomy and limited cortical disruption. It is not dependent on ventricular size. Localization of the colloid cyst is trivial because of modern stereotactic technology, and all standard microsurgical techniques can be used. The retractor is readily adaptable to any Leksell system. This technique shortens operative time, compared with conventional craniotomy, and allows for definitive treatment of the lesion.