A case of neonatal urinary ascites with severe hyponatremia is reported. Critical review of the literature on neonatal urinary ascites, which included determination of serum electrolytes, revealed a 70% incidence of hyponatremia. In an attempt to explain the mechanism of the hyponatremia, urinary ascites was produced in rats by creation of either a unilateral (uretero-peritoneal) or bilateral (vesicoperitoneal) shunt. Hyponatremia did not occur in the unilateral group but it was profound in the bilateral group. At 48 hours postoperatively renin was unchanged in the unilateral group but it was significantly elevated in the bilateral group. Aldosterone was elevated in the unilateral group and markedly elevated in the bilateral group. Urine entering the peritoneal cavity equilibrates with plasma. The proposed mechanism of hyponatremia in the bilateral group is autodialysis with intraperitoneal urine containing progressively lower sodium concentration secondary to increased renin and aldosterone.