The case of a neonate with a large vertex cephalocele is presented. The anatomical features of this anomaly were evaluated by means of magnetic resonance imaging and magnetic resonance angiography. Fusion of the thalami, dysgenesis of the corpus callosum, and failure of adequate formation of the interhemispheric fissure were characteristics of the major cerebral anomalies associated with the cephalocele. The absence of a falx in the midline, a split configuration of the superior sagittal sinus, and a dysgenetic tentorium with a concomitant abnormal venous drainage pattern were found in association with a large dorsal cyst. Repair of the anomaly was undertaken on the 3rd postnatal day. A cerebrospinal fluid shunt was required to treat hydrocephalus on Day 30. The child is well at age 3 years, but with significant developmental delay. The pathogenesis of this vertex cephalocele relates to semilobar holoprosencephaly and dorsal cyst formation. In addition, a disturbance in the separation of the diencephalic portion of the neural tube from the surface ectoderm or skin during the final phases of neurulation had occurred to help create the large cephalocele. Detailed preoperative imaging studies and awareness of the embryology and anatomy of this lesion facilitated the repair of the cephalocele. The prognosis of the child is determined not only by the presence of hydrocephalus, but also by the number of associated major cerebral anomalies. Options for treatment are discussed.