Sepsis-associated encephalopathy (SAE) is a diffuse brain dysfunction that occurs secondary to infection in the body without overt CNS infection. SAE is frequently encountered in critically ill patients in intensive care units, and in up to 70% of patients with severe systemic infection. The severity of SAE can range from mild delirium to deep coma. Seizures and myoclonus are infrequent and cranial nerves are almost always spared, but most severe cases have an associated critical illness neuromyopathy. Development of SAE probably involves a number of mechanisms that are not mutually exclusive and vary from patient to patient. Substantial neurological and psychological morbidities often occur in survivors. Mortality is almost always due to multiorgan failure rather than neurological complications, and is almost 70% in patients with severe SAE. Further research into the pathophysiology, management and prevention of SAE is needed. This Review discusses the epidemiology and clinical presentation of SAE. Recent evidence for SAE pathophysiology is outlined and a diagnostic approach to patients with this syndrome is presented. Lastly, prognosis and management of SAE is discussed.