The ratio between FABP5 and CRABPII determines cellular response to physiological level of retinoic acid; tumor cells undergo proliferation with high level of FABP5 and apoptosis with high level of CRABPII. We intended to study FABP5 and CRABPII expression in craniopharyngiomas, to establish craniopharyngioma cell model using explants method, and to study the effect of pharmacological dose of retinoic acid on craniopharyngioma cells. Expression of FABP5 and CRABPII in craniopharyngioma tissue from 20 patients was studied using immunohistochemistry. Primary craniopharyngioma cell cultures were established using tissue explants method. Craniopharyngioma cells were treated using various concentrations of all-trans retinoic acid, and cell growth curve, apoptosis, expression of FABP5, CRABPII and NF-κB were assayed in different groups. FABP5/CRABPII ratio was significantly higher in adamatinomatous group than that in papillary group. Cell cultures were established in 19 cases (95 %). Pharmacological level retinoic acid inhibited cell growth and induced cellular apoptosis in dose dependent manner, and apoptosis rate cells treated with 30 μM retinoic acid for 24 h was 43 %. Also, retinoic acid increased CRABPII, and decreased FABP5 and NF-κB expression in craniopharyngioma cells. High FABP5/CRABPII ratio is observed in adamatinomatous craniopharyngioma. Retinoic acid at pharmacological level induced craniopharyngioma cell apoptosis via increasing FABP5/CRABPII ratio and inhibiting NF-κB signaling pathway. Our study demonstrated that all-trans retinoic acid might be a candidate for craniopharyngioma adjuvant chemotherapy in future.