Acute obstructive hydrocephalus due to infratentorial extra-axial fluid collection (EAFC) is an extremely rare complication of foramen magnum decompression (FMD) and durotomy for Chiari malformation type I. Presence of infratentorial EAFC invariably causes obstruction at the level of the fourth ventricle or aqueduct of Silvius, thereby indicating its definitive role in hydrocephalus. Pathogenesis of EAFC is said to be a local arachnoid tear as a result of durotomy, as this complication is not described in FMD without durotomy. Controversy exists in management. Usually EAFC is said to resolve with conservative management; so hydrocephalus doesn't require treatment. However, in this case EAFC was progressive and ventriculo-peritoneal shunting (VPS) was needed for managing progressive and symptomatic hydrocephalus.