Infantile hydrocephalus, despite shunt treatment, can leave children with a variety of persistent neurological deficits. A rat strain (H-Tx) with inherited fetal-onset hydrocephalus, is a natural model for the study of progressive tissue changes resulting from hydrocephalus and the effects of shunt placement. The cerebral cortex of rat pups has been studied at post-natal day 4 (P4), early stage hydrocephalus and equivalent to a third trimester human fetus, at P11, intermediate stage hydrocephalus and equivalent to a newborn human infant, and at P21 at advanced stage hydrocephalus. At P4, there is interstitial edema (increased water, sodium and chloride) and a non-reversible change in membrane lipids, particularly the phosphomonoesters. By P11, there are additional, non-reversible, changes in intracellular potassium and energy metabolites (ATP and phosphocreatine). At P21, the cells are severely damaged and further intracellular changes include a decrease in N-acetylaspartate (NAA) and loss of amino acids and many organic osmolytes. The interstitial edema is approximately 75% reversed after shunt treatment. The loss of energy metabolites, NAA and osmolytes can be prevented by early shunt treatment at P4, but the subsequent potassium loss is not prevented. Shunt at P11 does not prevent loss of NAA or aspartate, but osmolytes are normalized. It is concluded that persistent tissue damage is initiated by changes in cell membrane components leading to a decrease in energy metabolism and loss of cell homeostasis. A more complete understanding of the mechanisms involved could lead to new approaches for therapy.