Purpose Post-hemorrhagic hydrocephalus (PHH) of prematurity is a devastating pathology. Neurodevelopmental disabilities, including cognitive and motor deficits are very commonly seen among this population. Thus, there is interest to delineate the pathophysiology of PHH to uncover potential therapeutic targets. Methods We performed a systematic review of the current literature on pathophysiological mechanisms and progressive strategies in the management of post-hemorrhagic hydrocephalus of prematurity. Our literature search identified a total of 58 articles pertaining to the pathophysiology, risk factors and management of posthemorrhagic hydrocephalus. Results Presence of high-grade germinal matrix hemorrhage does not always predict PHH and neither does obstruction of pathways seen on ultrasound or MRI scan. We also describe the management options for posthemorrhagic hydrocephalus, including surgical and non-surgical. Conclusion We conclude that pathogenesis of post-hemorrhagic hydrocephalus of prematurity is clearly multifactorial and definitive prediction of who will eventually develop PHH continues to be elusive.