Oculomotor nerve palsy is a rare finding in children and, when reported, is most frequently either congenital or acquired from postnatal trauma, infection, aneurysm, or migraine. Intracranial lipomas also represent an uncommon finding in children, and although their development is not completely understood, they are now thought to be congenital in nature. Here, we describe the case of a 23-month-old boy presenting to the emergency department with left-sided, complete, pupil-involving oculomotor nerve palsy. On magnetic resonance imaging, he was found to have an intracranial lipoma of the left interpeduncular fossa. The patient had gradual and spontaneous improvement of symptoms, with complete resolution reported at the 4-month follow-up visit. However, a second magnetic resonance image at 6 months revealed that the lipoma did not change in size. To our knowledge, intracranial lipomas have been previously reported as a possible cause of partial oculomotor nerve palsy in only one adult and have never been reported in a child. In addition, we did not find any reports of intracranial lipomas as a cause of complete, pupil-involving oculomotor palsy, although they are known to cause other cranial nerve pathology. We conclude that intracranial lipomas, although rare, should be considered in the differential diagnosis for oculomotor nerve palsy in children. Further investigation is needed to determine the true incidence of this association.