Arnold-Chiari malformation is a displacement of the brain into the spinal canal, often leading to hemodynamic distress. Arnold-Chiari malformation type III (CM III) is a rare and severe type that requires early detection to prevent complications. We aim to report this rare presentation of CM III. A 16-month-old girl with a massive tumor of the occiput suspected to be a meningoencephalocele with CM III was referred to the neurosurgery department. The patient was assessed with class 3 American Society of Anesthesiologist classification, posed challenges due to a difficult airway and the presence of a meningoencephalocele. The patient was scheduled for an elective surgery. Preoperative, the patient was lethargic with an abnormal heart rate and blood pressure. Induction was performed while preserving spontaneous ventilation, but was assisted by an oropharyngeal airway due to a short neck and obesity. The patient later developed laryngospasm thus, muscle relaxant and propofol were administered. A rescue laryngeal mask airway was inserted due to desaturation. Intubation was performed with video laryngoscope. When the surgeon opened the cele and removed the cerebrospinal fluid, the blood pressure began to decline. Resection of brain tissue caused the patient started to bleed, fluid and blood products were administered. At the end of surgery, the patient had stable hemodynamics and was transferred to the pediatric intensive care for monitoring. In patients with massive occipital meningoencephalocele and CM III, anesthetic management requires smooth intubation and prevention of excessive manipulation of the cervical joint to prevent increased intracranial pressure. The patient was not extubated because the brainstem could not be sufficiently reduced coupled with significant autonomic dysfunction.