Hypothalamic tanycytes in median eminence (ME) are emerging as a crucial cell population that regulates endocrine output, energy balance and the diffusion of blood-born molecules. Tanycytes have recently been considered as potential somatic stem cells in the adult mammalian brain, but their regenerative and tumorigenic capacities are largely unknown. Here we found that Rax+ tanycytes in ME of mice are largely quiescent but quickly enter the cell cycle upon neural injury for self-renewal and regeneration. Mechanistically, Igf1r signaling in tanycytes is required for tissue repair under injury conditions. Furthermore, Braf oncogenic activation is sufficient to transform Rax+ tanycytes into actively dividing tumor cells that eventually develop into a papillary craniopharyngioma-like tumor. Together, these findings uncover the regenerative and tumorigenic potential of tanycytes. Our study offers valuable insights into the properties of tanycytes, which will help us to manipulate tanycyte biology for regulating hypothalamic function and investigate the pathogenesis of clinically relevant tumors.