We present a full-term newborn infant who suffered from immediate postpartum severe respiratory distress. The infant had an inspiratory stridor as a result of a swelling of the soft palate, extending from the roof of the nasopharynx. Transoral endotracheal intubation resulted in normal saturation levels. Histologic examination after an open biopsy showed mature neuroglial tissue. Radiology demonstrated the presence of a right parapharyngeal process obstructing the nasopharynx and oropharynx and extending to the right middle and posterior fossa, via the foramen ovale. After transoral debulking, the infant was extubated successfully. After an uneventful period of 5 months, the patient was readmitted at our hospital for treatment of meningitis. Subsequently, the inspiratory stridor recurred, and staged surgery was performed. First, a transcranial approach was used to remove a large intradural part of the process and close the defect at Meckel's cave. Two weeks later the retro- and parapharyngeal part of the process were removed transorally. Given the site of the defect of the skull base and the intradural location of the process, the diagnosis is a transalar sphenoidal encephalocele. This is a rare type of basal encephalocele, and has never been reported in an infant nor known to present with respiratory distress. The pathogenesis, clinical presentation, pathology, and therapeutic implications of basal encephaloceles are discussed.