Hydraulic fluids are liquids used as the motive medium in hydraulic machinery and equipment. These fluids are used in a variety of machines, including automobiles. Car transmissions, power steering systems, and power brakes all require hydraulic fluids. Brake fluid, a subtype of hydraulic fluid, is specially made to have a low freezing point, a high boiling point, and hygroscopic abilities so it absorbs water. Hydraulic fluids are also used in tractors, excavators, forklifts, backhoes, bulldozers, garbage trucks, and other industrial machinery. Most aircraft flight control systems also require hydraulic fluid.

Hydraulic fluids contain numerous chemical compounds, including oils, esters, silicones, butanol, polyalkylene glycols (PAG), corrosion inhibitors, and many others. The three most common types of chemicals used in hydraulic fluids, however, are polyalphaolefins (PAO), phosphate esters, and mineral oil.

Luckily, the current interest in protecting the environment has created a demand for biobased and biodegradable hydraulic fluids. A biodegradable hydraulic fluid has a base stock of vegetable oils such as soybean, rapeseed, canola, or sunflower. These biobased fluids help to minimize pollution in the case of an oil leak.

These biodegradable fluids are an important advance because the chemicals used in a conventional hydraulic fluid can be extremely harsh on the environment. When there is a leak or spill, some of the chemicals stay on top of the soil while others sink into the groundwater. If the fluid leaks into a body of water, some of the chemicals will sink to the bottom, where it can stay for over a year. Fish and other marine life that live in contaminated water can absorb hydraulic fluid. Unfortunately, a biodegradable hydraulic fluid is much more expensive than a conventional fluid, so these biobased fluids are not widely used.

People can become exposed to the chemicals in a hydraulic fluid by touching it, swallowing it, or breathing the air near a machine that uses it. Exposure can also occur by touching contaminated soil or water. Not much is currently known about how airborne exposure to a hydraulic fluid affects human health. Ingesting these fluids can cause intestinal bleeding, pneumonia, or death. Workers who handle hydraulic fluids on a regular basis have reported weakness of the hands. If one has prolonged contact with most hydraulics fluids, there is the possibility of skin irritation.

Hydraulic fluid becomes hazardous when heated to its flash point, sprayed, or is vaporized. Proper storage requires that hydraulic fluid be stored in sealed metal containers, and the storage of large quantities should be done properly. Rags and clothing soaked in hydraulic fluid should also be contained in closed metal containers to avoid a possible fire hazard, and disposed of in a proper manner.