A controlled cavitation reactor is disclosed that is particularly suited to the treatment of abrasive fluids and slurries with a minimum of erosion and mechanical failure caused by abrasion. The reactor includes a generally cylindrical housing having a peripheral wall that extends between end plates. A rotor is rotatably disposed in the housing and has at least one outer peripheral surface spaced from the peripheral wall to define a cavitation zone therebetween. A plurality of bores extends through the peripheral surface of the rotor. The rotor may be formed with a central void zone between two lobes of the rotor with each lobe defining a separate cavitation zone with the peripheral wall of the housing. One or more inlet ports is arranged to introduce fluid to the housing tangentially and within one or more void zones. One or more exit ports is arranged to receive fluid from the housing tangentially within another void zone. As a result, fluid takes a spiral path into the housing, across the cavitation zone, and out of the housing. This greatly reduces sharp changes in direction and accordingly reduces abrasion and consequent damage.