When hydrocephalus develops, excessive cerebrospinal fluid accumulation usually occurs within the ventricular system, leading to a ventriculomegaly caused by increased intracranial pressure. Shunt malfunction, a common complication after a shunt operation, usually occurs, together with recurring ventricular dilatation. The authors report a case of shunt malfunction which manifested as a porencephalic cyst along the proximal catheter. The cyst subsided after the replacement of the shunt system, and this led to the patient's clinical improvement. We postulate that although the region around a catheter is an unusual site for cerebrospinal fluid collection, this finding should be considered as a shunt obstruction. The possible mechanism of reversible porencephaly is discussed and the literature is briefly reviewed.