A 7-year-old child having short stature presented with headache and vomiting of 6 months' duration. MRI of the brain showed a sellar and suprasellar mass suggestive of craniopharyngioma with hydrocephalus. He underwent a right ventriculo-peritoneal (V-P) shunting followed by a subtotal resection of the tumour. A year later, he presented with progressive ascites and umbilical hernia. Systemic examination was unremarkable except for massive ascites. Ultrasound abdomen confirmed free-fluid in the peritoneal cavity and the ascitic fluid was transudative. Ventriculo-cysternography revealed a functional and patent V-P shunt. A diagnosis of cerebrospinal fluid ascites (shunt ascites) was made and he underwent ventriculo-atrial shunting. After treatment the patient improved with the gradual disappearance of ascites.