We describe a 48-year-old female with acute onset of central diabetes insipidus followed by mild anterior pituitary dysfunction. Magnetic resonance imaging (MRI) revealed enlargement of the hypophysis-infundibulum accompanied by a cystic component. She underwent a transsphenoidal exploration of the sella turcica. Histological examination showed foreign body type xanthogranulomatous inflammation in the neurohypophysis which might have been caused by rupture of a Rathke's cleft cyst. The MRI abnormalities and anterior pituitary dysfunction improved after a short course of corticosteroid administration, but the diabetes insipidus persisted. The histological findings in this case indicated the site of RCC rupture and the direction of the progression of RCC induced neurohypophysitis and adenohypophysitis.