Neonatal and congenital hydrocephalus are common problems in humans. Hydrocephalus was induced in 1-day-old rats by injection of kaolin into the cisterna magna. At 7 and 21 days, magnetic resonance (MR) imaging was used to assess ventricle size, then brains were subjected to histopathological and biochemical analyses. Hydrocephalic pups did not exhibit delays in righting or negative geotaxis reflexes during the first week. At 7 days, there was variable ventricular enlargement with periventricular white matter edema, axon damage, reactive astrogliosis, and accumulation of macrophages in severe but not mild hydrocephalus. Cellular proliferation in the subependymal zone was significantly reduced. The cortical subplate neuron layer was disrupted. In rats allowed to survive to 21 days, weight was significantly lower in severely hydrocephalic rats. They also exhibited impaired memory in the Morris water maze test. Despite abnormal posture, there was minimal quantitative impairment of walking ability on a rotating cylinder. At 21 days, histological studies showed reduced corpus callosum thickness, fewer mature oligodendrocytes, damaged axons, and astroglial/microglial reaction. Reduced myelin basic protein, increased glial fibrillary acidic protein, and stable synaptophysin content were demonstrated by immunochemical methods. In conclusion, impairment in cognition and motor skills corresponds to ventricular enlargement and white matter destruction. Quantitative measures of weight, memory, ventricle size, and myelin, and glial proteins in this neonatal model of hydrocephalus will be useful tools for assessment of experimental therapeutic interventions.