Hyponatremia is defined by low serum sodium concentration and is the most common electrolyte disorder encountered in clinical practice. Serum sodium is the main determinant of plasma osmolality, which, in turn, affects cell volume. In the presence of low extracellular osmolality, cells will swell if the adaptation mechanisms involved in the cell volume maintenance are inadequate. The most dramatic effects of hyponatremia on the brain are seen when serum sodium concentration decreases in a short period, allowing little or no adaptation. The brain is constrained inside a nonextensible envelope; thus, brain swelling carries a significant morbidity because of the compression of brain parenchyma over the rigid skull. Serum sodium concentration is an important determinant of several biological pathways in the nervous system, and recent studies have suggested that hyponatremia carries a significant risk of neurological impairment even in the absence of brain edema. The brain can also be affected by the treatment of hyponatremia, which, if not undertaken cautiously, could lead to osmotic demyelination syndrome, a rare demyelinating brain disorder that occurs after rapid correction of severe hyponatremia. This review summarizes the pathophysiology of brain complications of hyponatremia and its treatment.