Abstract Background: Wide range of psychomotor development abnormalities can occur in compensated hydrocephalus, ranging from minor cognitive changes up to mental retardation; this may be attributed to the difficulty in differentiation between compensated hydrocephalus and slowly progressive hydrocephalus. Aim of Study: To establish whether CSF shunting proce-dures can improve the cognitive development in children with arrested hydrocephalus and apparent clinically normal. Patients and Methods: This study is a prospective rand-omized controlled trial included 20 consecutive children with arrested hydrocephalus in preschool age with no other cause of mental retardation. All the patients had deviated IQ (intel-ligence quotient) below than average) and they were subdivided into 2 groups: Group I control group; 10 patients had been followed-up clinically and group II study group; 10 patients had been surgically managed through ventriculoperitoneal shunting. Anterior fontanelle, orbitofrontal circumference and IQ are assessed initially and 6 months later and compared in both groups. Results: Ventricular shunt improved papilledema (5 out of 6 became normal fundi), improved cognitive function (5 out of 8 mild MR became average 90-110 IQ test). Ventricular shunt did not improve the ventricular size in all patients in both groups who still having papilledema. Conclusions: Young children with arrested HCP without any signs of increased ICP and average IQ should be followed carefully to detect any cognitive delay or decompansation. Ventricular shunting is helpful to improve psychomotor development in patients with cognitive delay.