Prenatal hydronephrosis is one of the most common urological congenital abnormalities detected by ultrasound. The incidence ranges from 0.59% to 0.69%. Approximately 50% of these fetuses do not have hydronephrosis on postnatal examination, whereas 25–33% of the rest have persistent hydronephrosis leading to the diagnosis of ureteropelvic junction (UPJ) obstruction. Renal ultrasonography and renal radionuclide scanning are the major modalities used for assessment and follow-up. Three main criteria used to determine the presence of obstruction are: (1) the magnitude of hydronephrosis present on ultrasound, (2) the relative renal function (RRF) measured by renography, and (3) the response of radionuclide washout with furosemide. Unfortunately, it is not always easy to determine obstruction; different types of management have been developed. Without depending on the severity of renal pelvis dilation, percentage of RRF, and response of radionuclide washout in the initial presentation, early surgery to preserve renal function and aggressive observation to prevent unnecessary surgery are two extremes on the spectrum of management for neonatal UPJ obstruction. Relying on renal function in renography, <35–40% or 5–10% of a decrease in the percentage of RRF or on the enlarging of hydronephrosis, respectively, and parenchymal thinning on ultrasonography are the indications for the surgical management to recover renal function in time. In addition to renal function change and imaging progression, the follow-up protocol and family compliance are the other considerations in prevention of impaired renal function. Through more than 40 years of development in the field of UPJ obstruction in infants, there have been several advances in management but controversies remain to be resolved. In this review, we focus on the surgical indications for the UPJ obstruction in this cohort.