Visual event-related P300 potentials, conventional visual evoked potentials, and psychometric tests were applied to patients with noncirrhotic chronic liver disease and to clinically nonencephalopathic and encephalopathic cirrhotics to compare their diagnostic efficacy in detecting early portosystemic encephalopathy (PSE). Sixty-four investigations were performed in 58 patients. The latencies of the P300 parameters were significantly longer in both the encephalopathic and nonencephalopathic cirrhotics than in the noncirrhotics, indicating distinctly abnormal cortical processing of visual stimuli in cirrhotic patients. The visual P300 potentials showed the highest sensitivity and specificity for grade I PSE. Abnormal P300 test results were also found in 78% of the clinically nonencephalopathic cirrhotics, while psychometric tests showed abnormalities in only 41%. The P300 latencies were similar in alcoholic and nonalcoholic cirrhotics. Significant inverse correlations were found between the P300 latencies and measures of quantitative liver function such as galactose-elimination capacity and aminopyrine breath test. It is concluded that visual event-related P300 potentials are a sensitive index of subclinical and grade I PSE. Furthermore, the degree of cognitive dysfunction detected by this method in patients with liver cirrhosis appears to be related to the reduction in hepatic metabolic capacity.