A system and method for inflating and deflating a catheter balloon using osmosis. An elongate catheter shaft has a proximally disposed osmotic membrane in fluid communication with a distally mounted balloon through a fluid-filled catheter lumen. The balloon is inflated by exposing the exterior of the membrane to a solution that is hypotonic relative to the solution within the catheter lumen. The balloon is deflated by exposing the exterior of the membrane to a solution that is hypertonic in relation to the solution within the catheter lumen.