Cerebral xanthomatosis was diagnosed in three female green water dragons (Physignathus cocincinus), all of which presented with progressive neurologic signs. No antemortem evidence for xanthomatosis was identified, but on postmortem examination cholesterol granulomas, composed of cholesterol clefts surrounded by macrophages and multinucleated giant cells, were found in the forebrain of each animal and were associated with significant displacement and pressure on the adjacent brain. Although the cause of xanthomatosis in these animals is unknown, nutrition and trauma may be involved in the pathogenesis of this condition.