According to the classical hypothesis of the cerebrospinal fluid (CSF) hydrodynamics, CSF is produced inside the brain ventricles, than it circulates like a slow river toward the cortical subarachnoid space, and finally it is absorbed into the venous sinuses. Some pathological conditions, primarily hydrocephalus, have also been interpreted based on this hypothesis. The development of hydrocephalus is explained as an imbalance between CSF formation and absorption, where more CSF is formed than is absorbed, which results in an abnormal increase in the CSF volume inside the cranial CSF spaces. It is believed that the reason for the imbalance is the obstruction of the CSF pathways between the site of CSF formation and the site of its absorption, which diminishes or prevents CSF outflow from the cranium. In spite of the general acceptance of the classical hypothesis, there are a considerable number of experimental results that do not support such a hypothesis and the generally accepted pathophysiology of hydrocephalus. A recently proposed new working hypothesis suggests that osmotic and hydrostatic forces at the central nervous system microvessels are crucial for the regulation of interstial fluid and CSF volume which constitute a functional unit. Based on that hypothesis, the generally accepted mechanisms of hydrocephalus development are not plausible. Therefore, the recent understanding of the correlation between CSF physiology and the development of hydrocephalus has been thoroughly presented, analyzed and evaluated, and new insights into hydrocephalus etiopathology have been proposed, which are in accordance with the experimental data and the new working hypothesis.