Hydrops fetalis, a condition characterized by abnormal accumulation of fluid and edema in the fetus, is the final common pathway in a number of pathological conditions. The diagnosis of hydrops is based on ultrasonographic findings of generalized edema along with a serous effusion (ascites, pleural effusion, or pericardial effusion). Polyhydramnios and placentomegaly may also be present. Historically, hydrops fetalis has been described in cases of Rh alloimmunization and severe erythroblastosis (immune hydrops). Hydrops is considered "nonimmune" if there is no evidence of fetal-maternal blood group incompatibility. Over the past few decades, nonimmune hydrops has been recognized more frequently. In a number of series, 80% to 90% of hydropic fetuses were considered nonimmune. Incidence ranges from 1 in 1,500 to 1 in 3,800 births. Etiology is diverse and associated conditions include cardiovascular malformations, chromosomal abnormalities, thoracic lesions, infections, metabolic disorders, fetal anemia and twinning. Overall prognosis is poor, with mortality between 50% and 98%. Advances in obstetric ultrasound and prenatal diagnosis have made it possible to diagnose a number of congenital anomalies early in gestation. In some cases, anatomic anomalies diagnosed in utero progress to nonimmune hydrops and almost certain fetal demise. It is these conditions that can be considered for fetal surgical intervention. This article reviews the pathophysiology and rationale behind surgical correction of two conditions that lead to hydrops: fetal thoracic lesions (congenital cystic adenomatoid malformation, pulmonary sequestration, and fetal pleural effusions) and sacrococcygeal teratoma (SCT).