Craniopharyngiomas are benign but locally invasive tumours of the sellar region that occur as two subtypes. The adamantinomatous type (aCP) occurs mainly during childhood while the papillary type (pCP) is found almost exclusively in adults. It is thought that aCPs arise from ectopic embryonic remnants of Rathke's pouch and these tumours share features with odontogenic tumours suggesting a common origin. The pathogenesis of pCPs is less understood but these tumours may arise from metaplastic transformation of anterior pituitary epithelial cells. Mutations in CTNNB1 that encodes β-catenin are found in around 70 % of aCPs. These mutations stabilise β-catenin, which evades destruction and accumulates in the nucleus and cytosol leading to constitutive activation of the Wnt signaling pathway. Expression of mutant β-catenin early in mouse pituitary development promotes the formation of tumours similar to aCPs. However, accumulation of β-catenin occurs only in small clusters of tumour cells even though the mutation is ubiquitous. These cell clusters are slow-growing and share some characteristics with pituitary stem cells. They are often present at the invading edge and express growth factors that may participate in paracrine signaling to surrounding cells. β-Catenin nuclear translocation may also occur in the absence of CTNNB1 mutations, suggesting that other genetic or epigenetic events can activate Wnt signaling in aCP. These mechanisms, as well as those underlying the molecular pathogenesis of pCPs remain to be identified.