Key Clinical MessageAbdominal pseudocyst is a rare complication of ventriculoperitoneal (VP) shunt placement. Ventriculopleural shunt (VPL) can be an effective treatment option for the recurrent complications of VP shunt failure.AbstractAbdominal pseudocyst (APC) is a rare complication of ventriculoperitoneal (VP) shunt placement for the treatment of congenital hydrocephalus. This case report presents a two‐and‐a‐half‐year‐old male child who underwent VP shunt placement for aqueductal stenosis‐related hydrocephalus. The patient subsequently developed recurrent shunt failure and an APC, which was managed initially by surgical excision of the cyst and repositioning of the catheter. However, shunt failure recurred. The patient underwent ventriculopleural (VPL) shunt conversion as a more viable option for recurrent blockage. Postoperatively, the patient developed respiratory distress with massive pleural effusion, which was treated with chest tube insertion. This case highlights the complexity of managing congenital hydrocephalus and its rare complication, APC. Prompt recognition and appropriate management of APC can lead to improved outcomes and minimize the need for invasive procedures. VPL shunt conversion can be considered an alternative treatment option when other treatments have failed. Further research is needed to establish guidelines for the management of APC and determine the long‐term effectiveness of VPL shunting.