Craniopharyngiomas (CPs) are uncommon intracranial benign neoplasms that located in sellar/parasellar region with clinically challenging. B7-H3 is an immune checkpoint molecule highly expressed in many malignant tumors. In this study, we analyzed whether B7-H3 is expressed in 44 CPs samples (adamantinomatous CPs: n = 30 and papillary CPs: n = 14), and whether it could serve as an immunotherapy target in CPs. Immunohistochemical analysis showed that B7-H3 was highly expressed in adamantinomatous CPs (184.3 ± 13.58) and papillary CPs (223.2 ± 11.89), while almost undetectable in normal brain tissue (24 ± 4.9). Besides, B7-H3 expression level was correlated with poor prognosis of patients with CPs. Immunofluorescence and Western blot analysis further suggested that β-catenin co-localized with B7-H3 and could promote its expression in adaCPs. B7-H3 expression level was positively correlated with staining intensity of IBA1⁺ cells, but negatively with T cell infiltration in CPs, suggesting that B7-H3 might play a role in the regulation of tumor microenvironment in CPs. Moreover, B7-H3/CD3 bi-specific T cell engager (BiTE) efficiently inhibited the growth of human primary craniopharyngioma cells in a time- and dose-dependent manner. Our results revealed B7-H3 was highly expressed in CPs and targeting B7-H3 might therefore be an effective therapeutic strategy against craniopharyngioma.