An important factor in making a recommendation for different treatment modalities in hydrocephalus patients (VP shunt versus endoscopic third ventriculostomy) is the definition of the underlying pathology which determines the prognosis/outcome of the surgical procedure. Third ventriculostomies (3rd VS) are successful mainly in obstructive hydrocephalus but also in some subtypes of communicating hydrocephalus. A simple, easily applicable grading system that is designed to predict the outcome of 3rd VS is proposed. The hydrocephalus is graded on the basis of the extent of downward bulging of the floor of the third ventricle, which reflects the pressure gradient between the 3rd ventricle and the basal cisterns, presence of directly visualised CSF pathway obstruction in MRI, and the progression of the clinical symptoms resulting in five different grades. In this proposed grading system, grade 1 hydrocephalus subtype shows no downward bulged floor of the 3rd ventricle, no obstruction of the CSF pathway, and no progressive symptoms of hydrocephalus. There is no indication for 3rd VS. Grades 2 to 4 show different combinations of the described parameters. Grade 5 subtype shows a markedly downward bulged floor of the 3rd ventricle and direct detection of the CSF pathway obstruction (i.e., aqueductal stenosis) with progressive clinical deterioration. Retrospective application of this grading scheme to a series of 72 3rd VS has demonstrated a high correlation with the outcome: The success rate in grade 3 reached 40%, in grade 4: 58%, and in grade 5: 95%. This standardised grading system predicts the outcome of 3rd VS and helps in decision making for 3rd VS versus VP shunting.