Cerebral vasospasm is one of the major complications of subarachnoid hemorrhage. The delayed occurrence of this complication allows for preventive management and early therapeutic interventions. Yet, accurate and timely diagnosis remains challenging and therapeutic options are rather limited. This review discusses new developments in the diagnosis and medical management of cerebral vasospasm made possible by technological advances and growing understanding of the complex pathophysiology of this disorder. CT protocols including CT perfusion and MRI with diffusion and perfusion sequences are increasingly employed in the evaluation of patients with suspected vasospasm. These radiological studies can add important information to that provided by transcranial Doppler and conventional angiography. Nimodipine for the prevention of delayed functional sequelae and hemodynamic augmentation therapy for the treatment of symptomatic vasospasm remains the mainstay of medical management. Novel strategies under investigation include the use of endothelin receptor antagonists, magnesium sulphate and statins. The value of albumin is being formally studied in an ongoing trial. Interventions to enhance nitric oxide may prove viable in the near future.