Cholesterol granuloma of the petrous apex is a newly recognized clinical entity distinct from cholesteatoma. Cholesterol granuloma usually produces symptoms of trigeminal, facial, and abducens nerve palsy and may not affect the auditory nerve. The characteristic computerized cranial tomographic (CCT) finding is a nonenhancing, smooth-walled, expansile lesion that is isodense with brain tissue in a patient with bilaterally well pneumatized mastoids and petrous apices. Treatment is limited to drainage of the cyst and insertion of a stent for permanent aeration of the petrous apex. Of ten cases of cholesterol granuloma of the petrous apex recently diagnosed at the Otologic Medical Group, the correct preoperative diagnosis was made in nine patients on the basis of CCT findings. Six of the nine patients had serviceable hearing preoperatively; serviceable hearing was maintained postoperatively in five patients.