Hepatic encephalopathy (HE) is a complex neuropsychiatric syndrome characterized predominantly by augmented neuronal inhibition and probably neuronal damage. Several theories concerning the pathogenesis of HE have been proposed; none of these theories is necessarily exclusive. Furthermore, the validity of none of them has been definitively proved experimentally. In this review article an important role. of endotoxin and rumor necrosis factor-alpha (TNF) in the pathogenesis of HE is suggested. The involvement of endotoxin and TNF in the pathogenesis of HE seems to be very convincing; it may explain many of the derangements seen in HE. It also seems to be in strong relation to the main theories about HE, the ammonia theory, the GABAergic theory, the benzodiazepine theory, and the AAA/false neurotransmitter theory, where these theories may represent some of the mechanisms whereby TNF may cause inhibition and damage to the CNS in HE, or may represent accompanying features to elevated levels of endotoxin and TNF, with no important role in the pathogenesis of HE. The possible involvement of endotoxin and TNF in the pathogenesis of HE may possess an important clinical application, for serum LPS and TNF concentrations may be of important diagnostic and prognostic value in HE, and treatment with antibodies against endotoxin and against TNF may have potentially beneficial therapeutic effects in this serious and potentially fatal disease.