Hyponatremia is the most common electrolyte abnormality encountered in children. In the past decade, new advances have been made in understanding the pathogenesis of hyponatremic encephalopathy and in its prevention and treatment. Recent data have determined that hyponatremia is a more serious condition than previously believed. It is a major comorbidity factor for a variety of illnesses, and subtle neurological findings are common. It has now become apparent that the majority of hospital-acquired hyponatremia in children is iatrogenic and due in large part to the administration of hypotonic fluids to patients with elevated arginine vasopressin levels. Recent prospective studies have demonstrated that administration of 0.9% sodium chloride in maintenance fluids can prevent the development of hyponatremia. Risk factors, such as hypoxia and central nervous system (CNS) involvement, have been identified for the development of hyponatremic encephalopathy, which can lead to neurologic injury at mildly hyponatremic values. It has also become apparent that both children and adult patients are dying from symptomatic hyponatremia due to inadequate therapy. We have proposed the use of intermittent intravenous bolus therapy with 3% sodium chloride, 2 cc/kg with a maximum of 100 cc, to rapidly reverse CNS symptoms and at the same time avoid the possibility of overcorrection of hyponatremia. In this review, we discuss how to recognize patients at risk for inadvertent overcorrection of hyponatremia and what measures should taken to prevent this, including the judicious use of 1-desamino-8d-arginine vasopressin (dDAVP).