We hypothesized that hydrocephalus in young animals could cause a delay in myelination. Hydrocephalus was induced in 3-week-old rats by injecting kaolin into the cisterna magna. Ventricular size was assessed by magnetic resonance imaging. After 1 to 4 weeks, rats were either sacrificed, or treated by diversionary shunting of cerebrospinal fluid and then sacrificed 3 to 4 weeks later. Samples of corpus callosum/supraventricular white matter, fimbria, medulla, and spinal cord were assayed for myelin-related enzyme activities including p-nitrophenylphosphorylcholine phosphocholine phosphodiesterase (PNPCP), glycerophosphocholine phosphocholine phosphodiesterase (GPCP), and 2',3'-cyclic neucleotide 3'-phosphodiesterase (CNPase), and the oligodendrocyte enzyme UDP-galactose, ceramide galactosyltransferase (CGa1T). Myelin basic protein (MBP) and proteolipid protein (PLP) were assayed in cerebrum by immunoblots and Northern blot. The corpus callosum was processed for electron microscopy and myelin thickness to axon diameter ratios were quantified. One week after induction of hydrocephalus, CGa1T and GPCP activity were reduced in the corpus callosum there was less MBP and PLP in the cerebrum, and myelin sheaths around axons greater than 0.4 micron in diameter were abnormally thin. With persistent hydrocephalus, the corpus callosum became thinned, axons were lost, and myelin-related enzyme activities and proteins were decreased. Treatment of hydrocephalus at 1 week largely prevented the damage while shunting at 4 weeks failed to restore the injured white matter. Early reduction in CGa1T activity in the medulla and spinal cord suggest that oligodendrocyte production of myelin was reduced, even before irreversible damage occurred in the corticospinal tracts. We conclude that hydrocephalus in the immature rat brain delays myelination, but compensatory myelination is possible if treatment is instituted prior to the development of axonal injury. Possible mechanisms of oligodendrocyte impairment are discussed.