Abstract Background Medulloblastoma (MB) is a malignant tumour of the cerebellum which can be classified into four major subgroups based on gene expression and genomic features. Single-cell transcriptome studies have defined the cellular states underlying each MB subgroup; however, the spatial organisation of these diverse cell states and how this impacts response to therapy remains to be determined. Methods Here, we used spatially resolved transcriptomics to define the cellular diversity within a sonic hedgehog (SHH) patient-derived model of MB and show that cells specific to a transcriptional state or spatial location are pivotal for CDK4/6 inhibitor, Palbociclib, treatment response. We integrated spatial gene expression with histological annotation and single-cell gene expression data from MB, developing an analysis strategy to spatially map cell type responses within the hybrid system of human and mouse cells and their interface within an intact brain tumour section. Results We distinguish neoplastic and non-neoplastic cells within tumours and from the surrounding cerebellar tissue, further refining pathological annotation. We identify a regional response to Palbociclib, with reduced proliferation and induced neuronal differentiation in both treated tumours. Additionally, we resolve at a cellular resolution a distinct tumour interface where the tumour contacts neighbouring mouse brain tissue consisting of abundant astrocytes and microglia and continues to proliferate despite Palbociclib treatment. Conclusions Our data highlight the power of using spatial transcriptomics to characterise the response of a tumour to a targeted therapy and provide further insights into the molecular and cellular basis underlying the response and resistance to CDK4/6 inhibitors in SHH MB.