Craniopharyngiomas present a major challenge to Gamma Knife radiosurgery (GKRS) due to their proximity to the optic apparatus. Based on observations of the evolving tumoral change on MRI and clinical results, an optimization of the treatment strategy and dose selection is possible. From March 1993 to September 1996, 21 patients with craniopharyngiomas were treated by GKRS. Every patient received stereotactic MRI exclusively for targeting and dose planning. The tumor and adjacent structures, including optic nerves, chiasm, and tracts were carefully identified and delineated on sagittal, coronal and axial films. The tumor volume ranged from 0.3 to 28 ml (average 9 ml). We purposefully apply multiple isocenters (average 9.1 shots) to create an isodose curve that covered the tumor optimally while sparing the optic pathway. The marginal dose prescribed was 9.5 to 16 Gy (50%). The maximal dose was 19 to 32 Gy. The maximal dose to the optic apparatus was 3.2 to 12.5 Gy. After GKRS, all patients were followed up clinically every month. MR studies were conducted every six months with the same techniques on the same scanner to investigate evolution of tumor volume and any adverse radiation effect. The follow-up period ranged from 6 to 40 months (mean: 18.4, median: 19). All patients were followed more than 6 months. Nineteen out of 21 cases (90.5%) achieved tumor control; that is, 18 tumor shrinkage (volume reduction: 15-95%) and 1 stabilized tumor growth. Among these 21 patients, 7 had improved visual acuity or visual field after GKRS, and the rest remained stable. Two patients developed mild T2 change on MRI without any endocrinological disturbance or visual impairment. Protection of the visual pathway can be secured by a sophisticated delineation on 3-dimensional stereotactic images with multiple-shot dose planning. Craniopharyngiomas with tumor volume up to 25 ml were treated safely and effectively, because the dose to the optic apparatus was kept as low as possiby this strategy. Further follow-up is needed to determine the highest tolerable dose to surrounding critical structures and the long-term outcome of tumor control.