Childhood craniopharyngiomas are histologically benign tumours arising from remnants of Rathke's pouch in the hypothalamic–pituitary region. The two common treatment approaches are primary total resection or limited resection followed by radiotherapy. To study the outcome after a primary surgical approach, we followed 25 consecutive patients (10 females, 15 males) under 16 years of age who were treated in a single institution with a management policy of radical tumour excision (mean age at diagnosis 9 years 2 months, SD 4 years 3 months; range 2 years 9 months to 15 years 11 months). Mean follow-up after primary surgery was 11 years 3 months (SD 7 years 7 months). Tumour control, and neurological, endocrine, and hypothalamic complications and their impact on health-related quality of life were assessed (medical follow-up, semi-structured interview, and questionnaires). Results of tumour control were generally good, however, local failure was observed in 6 of 25 patients, and severe late-treatment complications decreased quality of life for many long-time survivors. Endocrine deficiency occurred in 24/25, visual complications in 16/24, neurological complications in 8/24, obesity in 14/23, increased daytime sleepiness in 6/21, and significant school problems in 10/20. Patients with craniopharyngioma rated their health-related quality of life as considerably lower than healthy controls; the domains of social and emotional functioning were particularly affected. Parents' ratings were considerably lower than those of the patients. Poor functional outcome was associated with large tumours infiltrating or displacing the hypothalamus, the occurrence of hydrocephalus, and young age at diagnosis, but also with multiple operations due to tumour recurrence. Alternative treatment strategies should be considered, especially in very young patients with large tumours.