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Cavitation erosion is one of the most important causes of loss of hydraulic pump efficiency, wear and even failure. Although cavitation process is often understood, there is typically little understanding of the joint role of the hydraulic fluid, which is a component of the system, and the operation of the hydraulic pump. In this paper, an overview is provided that describes the fluid properties that most impact on cavitation damage, the cavitation process within the pump and components and the use of computer simulation to prove improved designs that minimize hydraulic cavitation when various types of fluids are used.