Prenatal hydronephrosis is diagnosed with an incidence of 1:100 to 1:500 maternal-fetal ultrasonographic studies. Although ultrasonography accurately describes dilation of the renal collecting system, it cannot define mechanical obstruction, a functional characteristic. The purpose of prenatal screening has changed from simple detection of hydronephrosis to selection for specific diagnosis-based management. The natural history of prenatal hydronephrosis is difficult to determine, and therefore physicians who take care of the fetus and infant are challenged with the following question: when does dilation of the renal collecting system indicate that serious pathology (ongoing renal deterioration) exists? The diagnosis of prenatal hydronephrosis, indications for and timing of prenatal intervention, and recommendations for treating children with a history of prenatal hydronephrosis are included in this review.