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We derive hydrodynamic equations for systems not in local thermodynamic equilibrium, that is, where the local stationary measures are “non-Gibbsian” and do not satisfy detailed balance with respect to the microscopic dynamics. As a main example we consider thedriven diffusive systems (DDS), such as electrical conductors in an applied field with diffusion of charge carriers. In such systems, the hydrodynamic description is provided by a nonlinear drift-diffusion equation, which we derive by a microscopic method ofnonequilibrium distributions. The formal derivation yields a Green-Kubo formula for the bulk diffusion matrix and microscopic prescriptions for the drift velocity and “nonequilibrium entropy” as functions of charge density. Properties of the hydrodynamic equations are established, including an “H-theorem” on increase of the thermodynamic potential, or “entropy”, describing approach to the …