Subdural effusion with concomitant ventriculomegaly (SEV) is not infrequently seen in patients with traumatic brain injury (TBI) after decompressive craniectomy (DC). The management of this entity remains very challenging. The aim of this study was to determine the incidence of SEV in patients who required DC.This retrospective study was done over 8 months (March 2011–October 2011). All Patients with severe head injury (GCS ≤8) who developed subdural collection with associated ventriculomegaly in the postoperative period following DC were included in the study. Criteria for ventriculomegaly included modified frontal horn index greater than 0.3 and/or presence of periventricular lucencies.270 patients underwent DC during the study period. SEV was seen in 80 (26.6%) patients. The mean age was 29.8 years with predominance of males (83%). Incidence of SEV was highest (59%) in the third week (day 14–21) after DC. 90% of SEV were ipsilateral to the side of craniectomy, and 81.25% (n = 65) were more than 10 mm in thickness. 47.5% (n = 38) of patients with SEV had IHH with mean thickness of 8.71 mm (range 3.5–23). 14 patients needed treatment in the form of various shunts. Of these the majority (86%) had concomitant IHH.Contrary to common perception, SEV has a very high incidence (26.6% in our study) in patients who required DC following TBI. Our study shows that IHH is an important prognostic marker for the need of CSF diversion in these patients.