Routine maternal ultrasonography (US) has revealed a very high incidence of fetal hydronephrosis (HDN), the postnatal outcome and management protocols of which are replete with controversies. Pelviureteric junction (PUJ) obstruction is the commonest postnatal diagnosis, and its management has no consensus to date. This study was carried out to define the postnatal outcome and natural history of fetal HDN and to identify the mode of management to be adopted to the best advantage. All patients were subjected to US 48 h postnatally or at first presentation and isotope renography (DTPA) with nuclear glomerular filtration rate (GFR) was carried out at 3-4 weeks of age or at presentation. Micturating cystourethrography (MCU) and/or direct radionuclide cystography (DRCG) were done in cases with bilateral HDN, nonobstructive HDN, dilated ureter on US, and recurrent urinary tract infection. Patients were then grouped for surgical intervention or conservative follow-up. Investigations were repeated periodically. A total of 56 patients were registered for the study (78 renal units) with a mean follow-up period of 14.6 months; 37 renal units were operated upon or scheduled for surgery and 67 had some organic pathology, of which PUJ obstruction was the commonest. Among patients with PUJ obstruction, indications for surgery included symptoms, a palpable mass, poor or deteriorating function, and a solitary functioning kidney. Patients operated upon showed improvement in function and/or drainage, while those followed conservatively remained stable or improved. Controversy still exists as to the optimal management of PUJ obstruction detected antenatally. While it is the commonest postnatal diagnosis, many other pathologies are now being encountered. In antenatally-diagnosed HDN, there is a good scope for conservative management provided rigid follow-up can be ensured, especially because a good recovery potential exists followed surgery whenever indicated.