Experimental hydrocephalus was induced by an intracisternal injection of 4% or 40% kaolin suspension in 2 days old Wistar rats. They were examined histologically and microangiographically 2 weeks after the injection of kaolin. Hydrocephalic rats were classified into 2 groups, severe hydrocephalic group A and mild hydrocephalic group B. In group A, a marked enlargement of the entire ventricular system with a thinning of the cerebral mantle was observed. On the other hand, the dilatation of the fourth ventricle was more pronounced compared with the other ventricles in group B. In group A, a spongy appearance of brain tissue was observed in the periventricular white matter accompanied with an intracerebral cavity. In these edematous areas, the lack of carbon black perfusion was apparent indicating an occurrence of microcirculatory disturbances. These microcirculatory disturbances and mechanical compression to the cerebral parenchyma may produce defective brain tissue (intracerebral cavity formation). The ependymal cell walls and subependymal glial cell layers were well preserved in spite of the damaged periventricular white matter. In group A, kaolin was present in the fourth ventricle and Sylvian aqueduct. Subependymal gliosis containing macrophages and newly produced blood vessels were observed in the region between the periventricular brain tissue and kaolin granules. These findings indicate that kaolin may produce changes in the ependymal cell and cerebral parenchyma as well as fibrosis and meningitis in the subarachnoid space.