Background: Dexmedetomidine (DEX), a highly selective α–2 agonist has been shown to provide good perioperative haemodynamic stability, analgesia leading to decreased intraoperative requirements of opioids, antihypertensives and vaporising agents. It may provide neuroprotection, and hence may be considered to be a suitable adjuvant during neurosurgical anaesthesia. Recent studies have shown that Dexmedetomidine decreases brain flow and CSF pressure without ischemic insult and effectively decreases cerebral and intracranial pressure also. Aims: This prospective, randomized, double–blind study was designed to assess the perioperative effect of intraoperative infusion of dexmedetomidine in patients with intracranial tumors undergoing craniotomy under general anesthesia. Material and Methods: Fourty ASA–I and ASA–II patients between 18–50 yrs of age to undergo craniotomy for intracranial tumors were divided randomly into 2 groups (twenty patients in each group). Group A:––Dexmedetomidine was given as a bolus dose of 1 mcg/kg in 20 minutes before induction of anesthesia, followed by a maintenance infusion of 0.4 mcg/kg/hr. The infusion was discontinued when surgery ended. Group B:––The patients received similar volumes of normal saline. Anaesthesia was standard for all the patients in both groups. Statistical Analysis : Statistical tests were performed using SPSS® version 11.05. Demographic data and operation characteristics were evaluated using descriptive statistics. A value of p–value < 0.05 was considered to be statistically significant. Results: The heart rate and mean arterial blood pressure decreased in patients of group A (dexmedetomidine group) more than group B (placebo group) with significant statistical difference between the two groups (P–value <0.05). The total fentanyl requirements from induction to extubation of patients increased in patients of group B more than in patients of group A (P–value <0.05). Conclusion: Continuous intraoperative infusion of dexmedetomidine during craniotomy for intracranial tumours under general anaesthesia maintained the haemodynamic stability, fentanyl requirements and improved significantly the outcomes.