Patients with chronic liver disease (Läennec's cirrhosis) present sodium chloride retention, leading to fluid accumulation within the extracellular space (edema) and specially in the abdomen (ascites). This article reviews the pathogenesis of the hemodynamic abnormalities observed in these patients, particularly the hypothesis of "primary arterial vasodilation", with an increased nitric oxide production by endothelial cells playing a major role in the pathogenesis of vasodilation. Since excessive renal sodium reabsorption precedes ascites formation, two hypotheses are analyzed with respect to the handling of renal sodium in chronic liver disease: the underfilling and overflow theories. Furthermore, the role of natriuretic peptides is reviewed, the increment in atrial natriuretic peptide observed in well compensated cirrhotic patients being considered as a compensatory response to volume expansion, although with renal resistance to this peptide in early stages of the disease. This review ends with an integrated explanation of the circulatory disturbances, renal sodium retention and renal resistance to atrial natriuretic peptide resulting in the sodium and water abnormalities observed in chronic liver disease.