Hydrocephalus and intracranial arachnoid cyst (IAC) are two disorders that can cause very similar neurological signs. While hydrocephalus is a common congenital or acquired neurologic disorder seen in both dogs and cats, intracranial arachnoid cyst is an infrequently reported developmental anomaly in veterinary medicine. The aim of this paper is to provide a concise overview to the clinical signs, diagnosis and treatment of these two diseases.