Lipoastrocytoma is an extremely rare tumor, with only a few cases described. We report a case of a low-grade astrocytoma occupying the right cortical lobe in the parafalcine location. The patient was admitted with headache, vomiting and altered sensorium for duration of 1 year. MRI revealed a large heterogeneous enhancing mass in the right fronto-parieto-temporal lobe with intratumoral fat along with cystic changes and calcification (correlated with CT) showing mass effect in the third ventricle. A gross total excision of the tumor was performed. Histologically, the tumor showed glial cells that contained lipid droplets coalescing into a single large droplet, similar in appeareance to adipocytes. Immunohistocemically, tumor cells strongly expressed GFAP and S-100 protein. Ki-67 labelling index was low. The patient remained in good neurological condition at 3 months follow-up. This case represents a rare variant of low-grade astrocytoma that is designated as lipoastrocytoma.