Expansion of the cerebrospinal fluid (CSF)-filled cerebral ventricles (ventriculomegaly) is the quintessential feature of congenital hydrocephalus (CH) but also seen in autism spectrum disorder (ASD) and several neuropsychiatric diseases. PTEN is frequently mutated in ASD; here, we show PTEN is a bona fide risk gene for the development of ventriculomegaly, including neurosurgically-treated CH. Pten-mutant hydrocephalus is associated with aqueductal stenosis due to the hyperproliferation of periventricular Nkx2.1+ neural precursors (NPCs) and CSF hypersecretion from inflammation-dependent choroid plexus hyperplasia. The hydrocephalic Pten-mutant cortex exhibits ASD-like network dysfunction due to impaired activity of Nkx2.1+ NPC-derived inhibitory interneurons. Raptor deletion or post-natal Everolimus corrects ventriculomegaly, rescues cortical deficits, and increases survival by antagonizing mTORC1-dependent Nkx2.1+ cell pathology. These results implicate a dual impact of PTEN mutation on CSF dynamics and cortical networks via the dysregulation of NPCs and their interneuron descendants. These data identify a non-surgical treatment target for hydrocephalus and have implications for other developmental brain disorders.