The effect of cerebral blood flow (CBF) and cerebrospinal fluid pressure (CSFP) of mechanical ventilation with positive end-expiratory pressure (PEEP) at 5, 10, and 15 cm H2O was studied in 23 paralyzed, ventilated goats which were divided into three treatment groups. Group I received no volume expansion agent to counteract the hemodynamic effects of PEEP. Group II received normal saline to maintain a constant arterial blood pressure (BP), and Group III received a mannitol solution for BP maintenance. In all three groups there were similar increases in central venous pressure (CVP) of approximately 2.5 times the zero PEEP level at 15 cm H2O PEEP (P less than 0.001). In Group I, BP fell an average of 32 per cent, cardiac output fell 47 per cent and cisternal CSFP increased 40 per cent above zero PEEP levels at 15 cm H2O PEEP (P less than 0.01). CBF in this group was decreased 18 per cent when compared with the zero PEEP baseline at 15 cm H2O PEEP (P less than 0.008). In Group II animals there were no significant changes in BP or cardiac output (CO) at any of the PEEP levels. CSFP in this group, at 15 cm H2O PEEP, increased 84 per cent above the baseline zero level and CBF decreased 32 per cent at 15 cm H2O PEEP when compared to the zero PEEP level (P less than 0.008). In Group III there were no significant reductions in BP or CO. Unlike Groups I and II, no significant changes in CFSP were observed at any level of PEEP. In addition, CBF in this group did not change significantly from the zero-PEEP baseline level any level of PEEP. Thus, when PEEP therapy is associated with substantial decreases in BP and CO, CBF may decrease as well. Maintenance of BP and CO by volume expansion with a crystalloid solution resulted in a greater reduction in CBF than in the untreated group but maintenance of BP and CO by mannitol infusion resulted in maintenance of CBF at the baseline, pre-PEEP level. The authors conclude that brain interstitial fluid pressure is an important variable in the determination of cerebral blood flow during ventilation with PEEP.