A hydraulic fluid reservoir assembly is disclosed. The reservoir assembly includes a reservoir housing defining a fluid chamber and a baffle member. The baffle member is disposed within the fluid chamber above the inlet and defines a central opening disposed radially inwardly of the reservoir housing. The central opening provides fluid communication between an inlet zone below the baffle and an upper zone above the baffle. The hydraulic fluid introduced through the inlet is directed to flow circumferentially along a radially outer section of the inlet zone whereby air entrained in the hydraulic fluid collects in a central portion of the inlet zone and is communicated to the upper zone thereby deaerating the fluid. A means for forming a substantially fluid tight seal between the reservoir housing and the baffle member is provided along an outer radial edge of the baffle member. A method of manufacture is also disclosed.