Craniopharyngiomas comprise approximately 1-3% of all intracranial tumors and arise from squamous epithelial rests along remnants of Rathke's cleft. They have bimodal age distribution. The ectopic sites reported are the nasopharynx, sphenoid bone, pineal region, cerebellopontine angle and third ventricle. We report a case of ectopic craniopharyngioma in the Foramen of Monro with restricted diffusion, which have is an unusual feature, not commonly reported and is a potential pitfall.