The ability of the kidneys to excrete sodium and free water is often impaired in patients with cirrhosis. Sodium retention is a sine qua non for ascites formation. The impairment of water excretion causes hyponatremia and hypo-osmolality. In addition, these patients frequently have functional renal failure caused by intense renal vasoconstriction. The renin-angiotensin-aldosterone system and the sympathetic nervous system, which are activated in most cirrhotic patients with ascites, and a nonosmotic hypersecretion of antidiuretic hormone are important mechanisms of sodium and water retention. Angiotensin II and sympathetic nervous activity may also be involved in the pathogenesis of functional renal failure. The renal production of prostaglandins is increased in cirrhotic patients with ascites as a homeostatic response to antagonize the vascular effect of endogenous vasoconstrictors and the tubular action of antidiuretic hormone. Nonsteroidal anti-inflammatory drugs should, therefore, be administered with caution in these patients because they may induce acute renal failure and water retention. Although sulindac inhibits the renal synthesis of prostaglandins in cirrhotic patients with ascites, it appears to have less effect on renal function than do other nonsteroidal anti-inflammatory drugs administered to these patients.