Intracranial dermoid cyst is a rare entity, accounting less than 1% of all intracranial tumors. The most common localization is midline at the posterior fossa. They usually cause symptoms related to compression, infection, hydrocephalus, or a combination of all. The controversy arises about the preoperative treatment planning. Since infection is a major risk in those patients, inserting a shunt at the same session of tumor removal may not be achieved. Total resection of tumor is a must. We present two cases of posterior fossa dermoid cysts with hydrocephalus as a complication. First case presented with the symptoms of meningitis. She had no hydrocephalus at the time of surgery. The second case had hydrocephalus but no sign of infection. Both cases needed ventriculo-peritoneal shunt insertion. Hydrocephalus may occur at any time during the course of the disease. But appropriate time of handling is important to avoid increased morbidity and mortality related to the shunt infection failure. (J Pediatr Neurol 2004; 2(3): 163–166).