There is a sellar and suprasellar mass with high signal intensity on T1 images. In craniopharyngioma, T1 signal intensity varies depending on cyst contents, which can appear hyperintense if they contain high protein, blood products, and/or cholesterol (in the classic adamantinomatous type). In the papillary variety, solid components appear isointense on T1-weighted images. The sella may be expanded, and hydrocephalus may be present, depending on the exact location of the tumor. Occasionally, craniopharyngiomas appear as intraventricular, homogeneous, soft-tissue masses without calcification. They may contain low-signal-intensity regions; this is observed in the papillary subtype.
The location of the adamantinomatous subtype is characteristic, with most tumors located in the sellar or suprasellar region. Contrast enhancement is typical and MR angiography may demonstrate displacement of the A1 segment of the anterior cerebral artery. Displacement of the optic chiasm may also be observed.

Reference: Atlas SW, ed: Magnetic Resonance Imaging of the Brain and Spine. 2nd ed. Lippincott-Raven; 1995: 894-8.

Credit: Dr Abhijit Datir