The authors propose a new operative technique for the intracranial transposition of an encephalocele by using the associated hydrocephalic state. In the first stage, the intracranial pressure buffering effect of the encephalocele sac is reduced by the closing of the dural defect. The repaired dural defect allows intraventricular pulse pressure to produce ventriculomegaly. In the second stage or in infants with hydrocephalus, the extracranially herniated brain is transposed into the intracranial cavity during ventricular shunting with appropriate drainage of cerebrospinal fluid.