Craniopharyngioma (CP) is a rare embryonic malformation of the sellar/parasellar region with a low histological grade. Clinical manifestations are related to hypothalamic/pituitary deficiencies, visual impairment, and increased intracranial pressure. Recent insight into the molecular pathogenesis of CP opens new perspectives on targeted therapy in papillary CP harboring BRAF-V600E mutations. Further research to elucidate pathogenic mechanisms and hopefully prevent hypothalamic involvement of CP is warranted. If the tumor is favorably localized, the therapy of choice is complete resection, with care taken to preserve the optical and hypothalamic functions. In patients with unfavorable tumor localization (i.e., hypothalamic involvement), the recommended therapy is a limited hypothalamus-sparing surgical strategy followed by local irradiation. Surgical treatment strategies should be based on a multidisciplinary approach involving experienced teams. Centralizing the treatment of CP in experienced “centers of excellence” and multicenter-based networks for reference assessments should be considered to assure a high standard of treatment quality. CP recurrence and progression are frequent. Irradiation has proven effective in reducing recurrences and progression. Proton beam therapy, available in a wider range in the near future, will help to avoid radio-oncological side effects. Anatomical involvement and/or surgical lesions of posterior hypothalamic areas can result in serious sequelae that compromise quality of life (QoL), such as hypothalamic obesity and psychopathological symptoms. Novel insights into neuropsychological sequelae after CP occurrence should be the basis for the development of therapeutic neuropsychological interventions. CP should be managed as a frequently chronic disease, providing ongoing care of pediatric and adult patients’ clinical and QoL consequences by experienced multidisciplinary teams.