Craniopharyngiomas are rare epithelial tumours arising along the path of the craniopharyngeal duct. Two major histological subtypes have been recognised, the papillary and the adamantinomatous. Craniopharyngiomas remain challenging tumours to manage and are associated with significant morbidities and mortality. Recent advances in the molecular pathology of these neoplasms have identified BRAF mutations in the papillary variant, offering promising options for targeted pharmacological treatment. The involvement of β-catenin and the Wnt pathway in the tumorigenesis of the adamantinomatous subtype has been previously established with the identification of stabilising mutations in exon 3 of CTNNB1. Further understanding of the pathogenesis of this subtype has been facilitated with the use of mouse models and xenograft experiments. It has been proposed that the clusters of cells with upregulated Wnt/β-catenin signalling induce tumour formation in a paracrine manner; the complex interactions occurring between different cell populations need to be further clarified for further expansion of this hypothesis. This review outlines recent key advances in our understanding of the molecular pathology of craniopharyngiomas and discusses some of the challenges that need to be overcome for the development of targeted therapies that will hopefully improve the management and the outcomes of these patients.