Surgical porto-caval anastomosis and percutaneous intrahepatic porto-caval shunt are effective in the management of bleeding esophageal varices but are associated with liver failure and a high incidence of encephalopathy. The neurochemical consequences of ammonia detoxification may be important with regard to the development of hepatic encephalopathy. Maintenance of splanchnic venous hypertension leads to less post-shunt hepatic encephalopathy because of diminished absorption of ammonia. Results of medical treatment of hepatic encephalopathy are contradictory. However, mortality and controversial results of surgical treatment in hepatic encephalopathy restrict its indications to a small number of patients. Prevention of hepatic encephalopathy begins with the selection of patients for surgical or percutaneous shunting.