We describe six cases from three unrelated consanguineous Egyptian families with a novel characteristic brain malformation at the level of the diencephalic-mesencephalic junction. Brain magnetic resonance imaging demonstrated a dysplasia of the diencephalic-mesencephalic junction with a characteristic 'butterfly'-like contour of the midbrain on axial sections. Additional imaging features included variable degrees of supratentorial ventricular dilatation and hypoplasia to complete agenesis of the corpus callosum. Diffusion tensor imaging showed diffuse hypomyelination and lack of an identifiable corticospinal tract. All patients displayed severe cognitive impairment, post-natal progressive microcephaly, axial hypotonia, spastic quadriparesis and seizures. Autistic features were noted in older cases. Talipes equinovarus, non-obstructive cardiomyopathy and persistent hyperplastic primary vitreous were additional findings in two families. One of the patients required shunting for hydrocephalus; however, this yielded no change in ventricular size suggestive of dysplasia rather than obstruction. We propose the term 'diencephalic-mesencephalic junction dysplasia' to characterize this autosomal recessive malformation.