Fetal-onset hydrocephalus (HC), which affects between 1:500 and 1:5000 live human births, results from unequal production and drainage of cerebrospinal fluid (CSF) and is associated with abnormal development of the cerebral cortex leading to severe neurological deficits. We previously found that in the hydrocephalic Texas rat, the CSF of affected fetuses induced a cell cycle arrest in neural progenitor cells. Here, we show that alterations in folate metabolism in the CSF of the developing cerebrum are likely responsible for this effect. We identified 3 folate enzymes in the CSF and demonstrate that low levels of one of these, 10-formyltetrahydrofolate dehydrogenase, are associated with HC in the hydrocephalic Texas rat. Therefore, we tested whether supplementation with specific folate species would improve developmental outcome. After daily administration of a combination of tetrahydrofolic and 5-formyltetrahydrofolic acids to pregnant dams, there was a significant reduction in the incidence of HC and improved brain development. By contrast, supplementation with folic acid increased the incidence of congenital HC in this model. These results indicate the complexities of folate metabolism in the developing brain and suggest that folate imbalance leading to HC in the hydrocephalic Texas rat fetuses can be treated with maternal folate supplementation using specific folate metabolites and combinations thereof.