Some evidence in the literature supports the topical application of papaverine to the cochlear nerve to prevent internal auditory artery vasospasm and cochlear ischemia as a method of enhancing the ability to preserve hearing during acoustic neuroma surgery. The authors report a case of transient facial nerve palsy that occurred after papaverine was topically applied during a hearing preservation acoustic neuroma removal. A 58-year-old woman presented with tinnitus and serviceable sensorineural hearing loss in her right ear (speech reception threshold 15 dB, speech discrimination score 100%). Magnetic resonance imaging demonstrated a 1.5-cm acoustic neuroma in the right cerebellopontine angle (CPA). A retrosigmoid approach was performed to achieve gross-total resection of the tumor. During tumor removal, a solution of 3% papaverine soaked in a Gelfoam pledget was placed over the cochlear nerve. Shortly thereafter, the quality of the facial nerve stimulation deteriorated markedly. Electrical stimulation of the facial nerve did not elicit a response at the level of the brainstem but was observed to elicit a robust response more peripherally. There were no changes in auditory brainstem responses. Immediately after surgery, the patient had a House-Brackmann Grade V facial palsy on the right side. After several hours, this improved to a Grade I. At the 1-month follow-up examination, the patient exhibited normal facial nerve function and stable hearing. Intracisternal papaverine may cause a transient facial nerve palsy by producing a temporary conduction block of the facial nerve. This adverse effect should be recognized when topical papaverine is used during CPA surgery.