Atypical teratoid rhabdoid tumor of the brain was described as a unique entity in the late 1980s. It occurs primarily in early childhood but the true incidence of the disease is not yet known. At presentation, the differential diagnosis includes medulloblastoma, primitive neuroectodermal tumor, ependymoma and choroid plexus carcinoma. Atypical teratoid rhabdoid tumor behaves in a very aggressive manner and while cure is possible for a small minority of patients, no standard or effective therapy has been defined for most patients. Since its first description, considerable pathologic, cytogenetic and molecular characterizations, as described in this review, have been accomplished that provide insight into the possible molecular etiology of the disease and of malignant rhabdoid tumors that occur outside the CNS. Co-operative group clinical trials that focus solely on atypical teratoid rhabdoid tumor are needed that incorporate biologic studies along with evaluations of aggressive treatment approaches. The goal of these trials should be to increase the cure rate for children with atypical teratoid rhabdoid tumor and further increase our understanding not only of atypical teratoid rhabdoid tumor, but also of other pediatric brain tumors.