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Abstract Introduction Differentiation of cystic mass lesions of the sellar and parasellar regions may pose a diagnostic dilemma for physicians, neurosurgeons, radiologists and pathologists involved in treating patients with these entities. A considerable number of tumors previously identified as craniopharyngiomas may, in fact, have been xanthogranulomas. We report a case of pituitary dysfunction caused by xanthogranuloma of the intrasellar region. Case presentation A 47-year-old man of Japanese descent presented to our institution with a tumor located exclusively in the intrasellar region which manifested as severe hypopituitarism. MRI revealed a clearly defined intrasellar mass that was heterogeneously hyperintense on T1-weighted images and markedly hypointense on T2-weighted images. We preoperatively diagnosed the patient with Rathke's cleft cyst or non-functioning pituitary adenoma. Although the tumor was completely removed using a transsphenoidal approach, the improvement of the patient's endocrine function was marginal, and continued endocrine replacement therapy was needed. Postoperatively, a histological examination revealed the tumor to be a xanthogranuloma of the intrasellar region. His visual field defects and headache improved. Conclusion Because diagnosis depends on surgical intervention and xanthogranulomas of the intrasellar region are very rare, the natural history of xanthogranuloma is still unknown. Therefore, this entity is difficult to diagnose preoperatively. We suggest that xanthogranuloma should be included in the differential diagnosis, even in the case of sellar lesions, to formulate appropriate postoperative management and improve endocrine outcomes.