In patients with cirrhosis, dehydration induced by diuretics is a common precipitant of hepatic encephalopathy (HE), which may respond to volume expansion. The mechanism of HE in this situation is not fully understood. The present study evaluates the effect of plasma volume expansion on the severity of HE, plasma and urinary ammonia in patients with diuretic-induced HE. Fifteen patients with alcoholic cirrhosis and diuretic-induced HE of Grade 2 or more were enrolled. In eight patients, 4.5% human albumin solution (HAS) was used for volume expansion and in seven patients colloid (Gelofusine) was used. Significant improvement of HE Grade was observed at 24 h and was sustained at 72 h ( P <0.05) only in the group treated with HAS. There were similar and statistically significant reductions in plasma ammonia concentration, plasma renin activity and angiotensin II and an increase in mean arterial pressure, renal plasma flow and urinary ammonia excretion in both groups. Plasma malondialdehyde was elevated in both groups, but was reduced significantly only in the group treated with HAS. The findings of the present study show that plasma volume expansion results in significant reduction in plasma ammonia concentration, possibly through an increase in urinary ammonia excretion. This reduction in ammonia concentration translates into an improvement in mental state only in those patients treated with HAS in whom concomitant reduction in oxidative stress was observed. These data support the notion that other factors, such as oxidative stress, act as adjuncts to ammonia in the pathogenesis of diuretic-induced HE and suggest a possible role for albumin infusion in its treatment.