Hepatic encephalopathy (HE) encompasses a spectrum of neuropsychiatric disorders related to liver failure. The development of HE can have a profound impact on mortality as well as quality of life for patients and carers. Ammonia is central in the disease process contributing to alteration in neurotransmission, oxidative stress, and cerebral edema and astrocyte swelling in acute liver failure. Inflammation in the presence of ammonia coactively worsens HE. Inflammation can result from hyperammonemic responses, endotoxemia, innate immune dysfunction or concurrent infection. This review summarizes the current processes implicated in the pathogenesis of HE, as well as current and potential treatments. Treatments currently focus on reducing inflammation and/or blood ammonia levels and provide varying degrees of success. Optimization of current treatments and initial testing of novel therapies will provide the basis of improvement of care in the near future.