The authors report the case of a 53-year-old woman in whom a T1-T2 spinal arachnoid cyst with associated arachnoiditis developed, compressing the thoracic spinal cord 1 year after the patient had suffered a Hunt and Hess Grade IV subarachnoid hemorrhage (SAH). Development of spinal arachnoiditis with or without an arachnoid cyst is a rare complication of aneurysmal SAH. Risk factors may include posterior circulation aneurysms, the extent and severity of the hemorrhage, and the need for cerebrospinal fluid diversion. Surgical drainage, shunt placement, or cyst excision, when possible, is the mainstay of treatment.