To date, most patients suffering from hydrocephalus have been treated by insertion of differential-pressure valves that have fairly constant resistance. Since intracranial pressure (ICP) is a variable parameter (depending on such factors as patient's position and rapid eye movement sleep) and since cerebrospinal fluid (CSF) secretion is almost constant, it may be assumed that some shunt complications are related to too much or too little CSF drainage. The authors suggest a new approach to treating hydrocephalus, the aim of which is to provide CSF drainage at or below the CSF secretion rate within a physiological ICP range. This concept has led the authors to develop a three-stage valve system. The first stage consists of a medium-pressure low-resistance valve that operates as a conventional differential-pressure valve until the flow through the shunt reaches a mean value of 20 ml/hr. A second stage consists of a variable-resistance flow regulator that maintains flow between 20 and 30 ml/hr at differential pressures of 80 to 350 mm H2O. The third stage is a safety device that operates at differential pressures above 350 mm H2O (inducing a rapid increase in CSF flow rate) and therefore prevents hyper-elevated ICP. An in vitro study is described that demonstrates the capability of this system to maintain flow rates close to CSF production under a range of pressures similar to those observed under various human physiological and postural conditions. Promising clinical results in 19 patients shunted with this valve are summarized.