A case of hypothalamic astrocytoma with precocious puberty is presented. In July 1989, a 2-year-old girl was admitted to our hospital because of vaginal bleeding and enlargement of breasts. Breast development was Tanner's stage 3 and no pubic hair was present. Endocrinological evaluation revealed a slightly high level of LH, but the responses of LH and FSH to LH-RH test resulted in exceedingly high values similar to those in adults. Plain CT scan showed an isodense mass in the suprasellar cistern which was not enhanced following administration of contrast medium. MR imaging revealed the precise location of the mass attached to the posterior hypothalamus between the pituitary stalk and the mamillary bodies in sagittal view. The signal intensity of the mass was homogenous and isointense relative to the gray matter on T1 weighted image. But on T2 weighted image, it showed high signal intensity compared with the normal brain parenchyma. A right fronto-temporal craniotomy was performed and the tumor was partially removed. Histological examination disclosed moderate hypercellularity of glial cells but no neurons were visible. This appeared to be astrocytoma grade II. In the literature, CT and MRI behaviour of hypothalamic hamartomas are almost similar to our case. Therefore we think it is not possible at the present time to differentiate a low grade astrocytoma from hamartoma when using CT and MRI alone. In this case, the mechanism of development of precocious puberty seemed to be due to hypothalamic compression by the tumor.