An 8-yr-old female child presented with acute onset of severe pain in the lower limbs and difficulty in walking. Spine MRI showed hyperintense signals on T2 weighted images at T2-T3 level, which was intramedullary in location. The patient was operated and histopathology reported as neuroepithelial cyst. Spinal intramedullary neuroepithelial cysts are rare. Spinal cord compression due to the cyst is very uncommon and because of its rarity the present case is being reported. The clinical features, embryogenesis and literature were reviewed briefly.