Hydrocephalus was induced in rabbits by injection of silicone oil into the cisterna magna. At 1 and 8 weeks postinjection the rabbits were either sacrificed or treated by cerebrospinal fluid shunting for 1 week. Blood vessel profiles in the periventricular neuropil were examined by light microscopy. In the caudate nucleus, septal area, and corpus callosum, hydrocephalus caused a reduction in the number of capillaries but no changes were observed in the number of larger blood vessels. Shunting reduced the size of the ventricles to normal and the number of capillaries increased if hydrocephalus was present for 1 week prior to shunting. If hydrocephalus was present for 8 weeks prior to shunting, the number of capillaries did not increase. These observations support the concept that collapse of capillaries may account for the decreased cerebral blood flow that has been measured in hydrocephalic brains.