An adult, intact male sugar glider (Petaurus breviceps) presented for acute caudal abdominal swelling. Treatment by the referring veterinarian included aspiration of urine from the swelling. On physical examination, mild depression, pale mucus membranes, and caudal abdominal swelling were noted. Focused ultrasonographic assessment revealed a fluid-filled caudal abdominal structure and subjective bladder wall thickening. The following day, the sugar glider was severely depressed. Hematology results included hypoglycemia, hyperkalemia, hyponatremia, and azotemia. Ultrasonography revealed bilateral hydronephrosis and hydroureter. Despite supportive care, the animal died. Postmortem examination confirmed bilateral ureteral dilation, renal petechial hemorrhage, and dilation of the right renal pelvis. Submucosal edema, hemorrhage, and lymphoplasmacytic infiltration of the urinary bladder, ureters, and renal pelvises were noted. Hyperplasia of the urinary bladder and ureteral epithelium, coupled with inflammation, may have caused functional obstruction leading to bilateral hydronephrosis and hydroureter. This is the first reported case of hydronephrosis in a marsupial.