Based on observations in 110 children with nephrotic syndrome (NS) and data from the literature, existing concepts on the pathogenesis of edema formation in the NS have been modified. The data suggest that the basic abnormality is a primary disturbance in renal sodium excretion. Depending on the stage in the development of the NS, the rate of progression in the development of hypoproteinemia, and the absolute levels of plasma oncotic pressure, functional hypovolemia may develop, resulting in stimulation of hemostatic mechanisms and secondary sodium retention. This applies as much to patients with minimal change NS as to patients with histological lesions. Alterations in kidney function (glomerular filtration rate, renal plasma flow, filtration fraction) in the NS cannot be explained by hypo- or hypervolemia, but reflect variations in plasma oncotic pressure and glomerular basement membrane permeability. These abnormalities will also influence sodium excretion. Evaluation of the presence of functional hypovolemia will have therapeutic consequences. A quick diagnosis can be made by assessment of FENa+ and UK+/ (UK+ + UNa+) Sodium retention associated with increased distal Na/K exchange indicates functional hypovolemia, and may be treated by albumin infusion if clinically required.