This report describes two cases of craniopharyngioma with perifocal edema. In both patients, computed tomography and magnetic resonance imaging (MRI) revealed that the tumors occupied the suprasellar cistern, invaginated the floor of the 3rd ventricle and were tightly adherent to the ventricular walls. The intraventricular portions of the tumors were cystic, containing protein-rich fluid as suggested by MRI and confirmed by operative findings. There was perifocal edema in the hypothalamus adjacent to the intraventricular tumor, the optic tracts, and the posterior limbs of the internal capsules, resembling the shape of a moustache on axial computed tomographic and MRI scans. The perifocal edema subsided after treatment of the intraventricular tumor by surgical resection or radiation therapy. The "moustache" appearance seems a unique, characteristic feature of perifocal edema, which is observed infrequently with certain craniopharyngiomas.