PURPOSE: To evaluate the spectrum of MR characteristics of cystic acoustic schwannoma and to investigate its incidence. METHODS: We retrospectively reviewed the MR findings and clinical records of 16 patients with cystic acoustic schwannomas. In addition, the MR examinations of 411 consecutive patients referred for clinical suspicion of acoustic schwannomas were reviewed retrospectively to assess the incidence of acoustic schwannomas with cystic lesions arising from the internal auditory canal. RESULTS: Of the 16 acoustic schwannomas with MR evidence of intramural cysts, 11 tumors had single small cysts, and five had multiple intramural cysts of variable size. Intramural cysts in 11 of the 16 tumors exhibited higher signal intensity than that of cerebrospinal fluid; the remainder were isointense to cerebrospinal fluid on both T1- and T2-weighted images. All intramural cysts showed circumferential enhancement after contrast administration. Nine of the 16 cystic acoustic schwannomas also had MR evidence of extramural/arachnoid cysts. Six of the extramural/arachnoid cysts had epicenters away from the dural interface, and the other three cysts were broadly based against the dura. The incidence of cystic acoustic schwannomas was 11.3% and association with extramural/arachnoid cysts 7.5%. CONCLUSION: Our series suggests that cystic changes in acoustic schwannomas and the association with extramural/arachnoid cysts are not as rare as previously reported by other diagnostic methods. The high signal intensity of intramural cysts is probably related to necrotic material, blood, or colloid-rich fluid. The difference in the MR characteristics of extramural/arachnoid cysts associated with acoustic schwannomas and those of typical arachnoid cysts not associated with neoplasia may be related to higher protein and/or colloid contents secreted by the tumor. Most extramural/arachnoid cysts had epicenters between the tumor and brain, suggesting that the most likely mechanism of formation is peritumoral adhesions. It creates a pseudoduplication caused by the trapping of fluid between the leptomeninges and the mass, resulting in an acquired type of arachnoid cyst.