A 27-year-old male presented with memory loss. With magnetic resonance imaging (MRI), enhanced masses on the right side of hypothalamus, right side of anterior basal ganglia, and left side of hypothalamus were found. Histological analysis of the tumor by stereotactic biopsy proved it to be a germinoma. When related to the map of the thalamic nuclei, the tumor involved anterior column of the fornix and anterior nuclei of the thalamus. Neuropsychological tests prior to radiation therapy disclosed only short-term memory disturbance. The patient received radiation therapy to a total dose of 55 Gy to the primary lesion. After the completion of radiation therapy, the enhanced effect disappeared on gadolinium enhanced T1-weighted MRI. Single photon emission computed tomography indicated improvement in blood flow in the anterior portion of the bilateral thalami. Neuropsychological tests after radiation therapy showed improvement in short-term memory compared with baseline. Test results have remained stable for two and half years. This case indicates the possibility of improvement in memory function by treatment for tumor when it involves part of Papez circuit. Nevertheless, a decrease in intellectual ability by irradiation remains the major problem. Better approaches not only for cure but also to reduce the late effects should be undertaken when radiation therapy is the treatment of choice.