Hepatic encephalopathy is one of the most important clinical manifestations in decompensated liver cirrhosis. Accepted concepts regarding the pathophysiology of hepatic encephalopathy are that the endogenous neurotoxic substances, including ammonia: (i) escape from catabolism by the liver due both to the impaired function of the cirrhotic liver and also to the presence of portal systemic shunting; (ii) circulate at elevated concentrations in the systemic blood flow; (iii) reach the brain through the blood-brain barrier; and (iv) impair cerebral function leading to disturbances of consciousness. The majority of these toxic substances are produced in the intestine by the bacterial flora, and are absorbed into the portal venous flow. The epidemiology of liver cirrhosis depends particularly on its etiology, and shows a marked geographic difference worldwide between Western, and Asian countries. Hepatic encephalopathy developed at an annual rate of 8% in cirrhotics in Far Eastern studies. In Eastern and Far East countries, therapeutic options are similar to those in the western hemisphere, but pronounced application of dietary restriction, antimicrobial agents, disaccharides, shunt obliteration and branched chain amino acids is noted. In spite of improved therapeutic options for encephalopathy, the long-term survival is still low. Thus, hepatic encephalopathy remains a serious complication of liver cirrhosis. Establishment of truly effective prevention modalities and broader application of liver transplantation will help rescue patients suffering from this complication of liver cirrhosis in the near future.