Eight cases of liver failure and encephalopathy were observed among twenty cases of grade 3 and grade 4 dengue hemorrhagic fever/dengue shock syndrome admitted to the Department of Pediatrics, University Hospital, Kuala Lumpur from January 1990 to December 1991. All patients with deterioriation in mental status showed a marked increase in liver enzymes (aspartate and alanine aminotransaminases) and severe coagulopathy. Six patients needed cerebral protection, including ventilation, intravenous sedation and muscle relaxants. There was one death during the period of study and one case of residual hemiparesis in a boy who had, in addition, intracerebral hemorrhage. All other survivors had complete recovery of liver and neurological function.