BACKGROUND: Gorham-Stout disease (GSD) is an extremely rare osteolytic disorder characterized by resorption of skeletal bone due to aggressive, nonneoplastic lymphatic proliferation. OBSERVATIONS: The authors report the 14th case of GSD of the craniovertebral junction (CVJ), which resulted in cranial settling, basilar impression, and an acquired Chiari malformation type I (CM-I) in a pediatric patient. A 4-year-old girl initially presented with recurrent symptoms of pharyngitis, bacteremia, and neck pain. She continued experiencing waxing and waning symptoms of fever and neck pain that gradually worsened. At 12 years old, imaging revealed progressively worsening osteolytic changes with bone marrow edema involving the CVJ and subaxial cervical spine with progressive cranial settling, basilar impression, and 14 mm of tonsillar herniation, consistent with an acquired CM-I. She underwent a frontal bone biopsy, which confirmed the diagnosis of GSD. Treatment with sirolimus and bisphosphonates stabilized the osteolysis. LESSONS: GSD represents a rare group of osteolytic bone disorders with a highly variable clinical course. A high index of suspicion is warranted, as diagnosis can be challenging. Early referral to a specialized center is key, as treatment is directed toward symptomatic management and a multidisciplinary team approach. GSD is another syndrome associated with CVJ bony changes and tonsillar herniation. https://thejns.org/doi/10.3171/CASE24298.