Adamantinomatous craniopharyngiomas (ACPs) are clinically challenging tumours, the majority of which have activating mutations in CTNNB1. They are histologically complex, showing cystic and solid components, the latter comprised of different morphological cell types (e.g. β-catenin-accumulating cluster cells and palisading epithelium), surrounded by a florid glial reaction with immune cells. Here, we have carried out RNA sequencing on 18 ACP samples and integrated these data with an existing ACP transcriptomic dataset. No studies so far have examined the patterns of gene expression within the different cellular compartments of the tumour. To achieve this goal, we have combined laser capture microdissection with computational analyses to reveal groups of genes that are associated with either epithelial tumour cells (clusters and palisading epithelium), glial tissue or immune infiltrate. We use these human ACP molecular signatures and RNA-Seq data from two ACP mouse models to reveal that cell clusters are molecularly analogous to the enamel knot, a critical signalling centre controlling normal tooth morphogenesis. Supporting this finding, we show that human cluster cells express high levels of several members of the FGF, TGFB and BMP families of secreted factors, which signal to neighbouring cells as evidenced by immunostaining against the phosphorylated proteins pERK1/2, pSMAD3 and pSMAD1/5/9 in both human and mouse ACP. We reveal that inhibiting the MAPK/ERK pathway with trametinib, a clinically approved MEK inhibitor, results in reduced proliferation and increased apoptosis in explant cultures of human and mouse ACP. Finally, we analyse a prominent molecular signature in the glial reactive tissue to characterise the inflammatory microenvironment and uncover the activation of inflammasomes in human ACP. We validate these results by immunostaining against immune cell markers, cytokine ELISA and proteome analysis in both solid tumour and cystic fluid from ACP patients. Our data support a new molecular paradigm for understanding ACP tumorigenesis as an aberrant mimic of natural tooth development and opens new therapeutic opportunities by revealing the activation of the MAPK/ERK and inflammasome pathways in human ACP.