One of the most serious complications of chronic or fulminant liver failure is hepatic encephalopathy (HE), associated most commonly with cirrhosis. In the presence of chronic liver disease, HE is a sign of decompensation, while in fulminant liver failure its development represents a worrying sign and usually indicates that transplantation will be required. Despite the significance of HE in the course of liver disease, the progress in development of new therapeutic options has been unremarkable over the last 20 years. An up-to-date review regarding HE, including both research and review articles. HE is a serious and progressive, but potentially reversible, disorder with a wide spectrum of neuropsychiatric abnormalities and motor disturbances that ranges from mild alteration of cognitive and motor function to coma and death. Although a clear pathogenesis is yet to be determined, elevated ammonia in serum and the central nervous system is the mainstay for pathogenesis and treatment of HE. Management includes early diagnosis and prompt treatment of precipitating factors. Clinical trials and extensive clinical experience have established the efficacy of diverse substances in HE treatment. Novel therapies with clinical promise include: L-ornithine L-aspartate, sodium benzoate, phenylacetate, AST-120, and the molecular adsorbent recirculating system. Eventually, liver transplantation is often the most successful long-term therapy for HE.