Aquaporin-4 (AQP4) channels play an important role in brain water homeostasis. Water transport across plasma membranes has a critical role in brain water exchange of the normal and the diseased brain. AQP4 channels are implicated in the pathophysiology of hydrocephalus, a disease of water imbalance that leads to CSF accumulation in the ventricular system. Many molecular aspects of fluid exchange during hydrocephalus have yet to be firmly elucidated, but review of the literature suggests that modulation of AQP4 channel activity is a potentially attractive future pharmaceutical therapy. Drug therapy targeting AQP channels may enable control over water exchange to remove excess CSF through a molecular intervention instead of by mechanical shunting. This article is a review of a vast body of literature on the current understanding of AQP4 channels in relation to hydrocephalus, details regarding molecular aspects of AQP4 channels, possible drug development strategies, and limitations. Advances in medical imaging and computational modeling of CSF dynamics in the setting of hydrocephalus are summarized. Algorithmic developments in computational modeling continue to deepen the understanding of the hydrocephalus disease process and display promising potential benefit as a tool for physicians to evaluate patients with hydrocephalus.