STUDY DESIGN: A case report and review of the literature. OBJECTIVES: To describe the diagnosis and successful treatment of the synovial cyst arising from the transverse ligament in a patient with Os odontoideum and atlantoaxial instability. SUMMARY OF LITERATURE REVIEW: Synovial cyst arising from the transverse ligament of the axis is extremely rare and thought to be attributed to degenerative changes of the C1-C2 facet joints or microtraumas. Direct excision of the cyst is the only treatment method described in previous reports. MATERIALS AND METHODS: A case of synovial cyst arising from the transverse ligament of the axis in a 45-year-old man with Os odontoideum and atlantoaxial instability was managed with posterior atlantoaxial fusion alone. The characteristic MRI findings and surgical treatment, and related literature are reviewed. RESULTS: MRI of the cervical spine showed a large cystic mass located at the transverse ligament of the axis which was com-pressing the spinal cord near the C1-C2 junction: the images showed a low signal intensity on T1WI; high signal intensity on T2WI; and rim enhancement with no internal enhancement on Gadolinium enhanced T1WI. The spontaneous resolution of the cyst was identified on the follow-up MRI taken at 3 months after operation and clinical improvement was achieved. CONCLUSIONS: The MRI findings of spontaneous resolution of synovial cyst arising from the transverse ligament of the axis after posterior atlantoaxial fusion alone suggest that stable fusion rather than direct excision of the cyst should be considered over the surgical option when the location of the cyst is difficult or dangerous to approach surgically.