Ascites describes the condition of pathologic fluid accumulation in the peritoneal cavity. Cirrhosis is the most common cause of ascites worldwide, with a half of cirrhotic patients developing ascites within 10 years of diagnosis. The “underfill” and “overflow” theories have traditionally been used to explain the pathogenesis of ascites in cirrhosis. However, with advances in hemodynamic and neurohumoral studies, it has been shown that neither of these theories fully explains the pathophysiologic mechanisms involved. The key roles of portal hypertension and vasodilators such as nitric oxide (NO) in the process of ascites formation have now been recognized. This led to the proposal of the peripheral arterial vasodilatation theory which includes components of both the “underfill” and “overflow” theories. Recently, the role of gut bacteria in the pathogenesis of ascites has been demonstrated. Bacterial translocation is now known to be a key event preceding the onset of ascites. Bacterial DNA and endotoxin have been shown to stimulate NO synthesis. This led to the proposal of a modified version of the vasodilatation hypothesis, “the systemic inflammation hypothesis,” which proposes that translocated bacteria or their products stimulate the release of proinflammatory cytokines which in turn stimulate NO synthesis. Cardiac dysfunction (cirrhotic cardiomyopathy) has also been described in cirrhosis and is believed to contribute to the reduction in effective circulating volume which stimulates renal sodium and water retention. Initial treatment measures include salt restriction and diuretics. Drugs known to reduce glomerular perfusion or directly toxic to the kidneys must be stopped. Initial therapeutic paracentesis should be done in those presenting with tense ascites. There is no need for albumin infusion if the amount of fluid removed is less than 5 liters. For those with refractory ascites, beta-blockers should be stopped. Treatment options include aquaretics; serial large-volume paracentesis with albumin infusion or midodrine in place of albumin; transjugular intrahepatic portosystemic shunt; peritoneovenous shunt; low-flow ascites pump; and liver transplantation.