The mechanism of formation of extracellular fluid is first described, followed by an explanation of the relation between osmotic force, reflection coefficient and molecular size. The possible mechanism of brain extracellular fluid formation is then proposed in relation to the restriction offered by the blood-brain barrier. The functions and compositions of cerebrospinal fluid (CSF) are then described followed by sections on the process of formation of CSF, the non-electrolytes and proteins in CSF, the drainage mechanisms and protein synthesis by the choroid plexus.