Posthemorrhagic hydrocephalus remains a complication of preterm birth for which we lack a clear understanding and a curative therapy. Transforming growth factor beta (TGF-beta) is a cytokine that upregulates the production by fibroblasts of extracellular matrix proteins. We hypothesized that TGF-beta might be released into cerebrospinal fluid (CSF) after intraventricular hemorrhage and play a role in posthemorrhagic hydrocephalus. Total TGF-beta1 and TGF-beta2 were measured by immunoassay in CSF samples from 12 normal preterm infants, nine preterm infants with transient posthemorrhagic ventricular dilation, and 10 infants who subsequently developed permanent hydrocephalus. Five infants received intraventricular tissue plasminogen activator, and two infants were treated by drainage irrigation and fibrinolytic therapy. Median TGF-beta1 in normal CSF was 0.495 ng/mL. In infants with transient posthemorrhagic ventricular dilation, median initial CSF TGF-beta1 was 2.1 ng/mL. Infants who subsequently had permanent hydrocephalus had median initial CSF TGF-beta1, 9.7 ng/mL (differences between groups p < 0.01). Intraventricular recombinant tissue plasminogen activator was followed by a rise in CSF TGF-beta1 (p = 0.0007). Drainage irrigation and fibrinolytic therapy was followed by a fall in CSF TGF-beta1. TGF-beta2 was detected in CSF and showed similar trends, but the CSF concentration of TGF-beta1 was more than 20 times higher. These findings support the hypothesis that TGF-beta1 is released into CSF after intraventricular hemorrhage and may play an important part in hydrocephalus. The results help to explain the failure of intraventricular fibrinolytic therapy.