Chiari malformation type III is an extremely rare anomaly characterized by a small posterior fossa and a low occipital/high cervical encephalocele with herniation of the posterior fossa contents (that is, the cerebellum and/or the brainstem, occipital lobe, and fourth ventricle). We report a case of Chiari malformation type III in a neonate, discuss the etiopathogenetic and radiological features, and review the pertinent literature.