Renal function abnormalities and ascites in cirrhosis are the final consequence of a circulatory dysfunction characterized by marked splanchnic arterial vasodilation. This causes a reduction in effective arterial blood volume and the homoeostatic activation of vasoconstrictor and sodium-retaining systems. Albumin is very effective in preventing renal failure associated with large-volume paracentesis and spontaneous bacterial peritonitis, conditions that are known to cause an impairment of circulatory function in patients with cirrhosis and ascites. Moreover, albumin administration improves survival in patients with spontaneous bacterial peritonitis. In patients with hepatorenal syndrome the administration of vasoconstrictor drugs in combination with albumin improves circulatory and renal function markedly and survival slightly. By contrast, the administration of albumin without vasoconstrictors has marginal or no effects on renal function in this setting.