Hepatic encephalopathy, a disorder of the central nervous system, may develop secondary to severe hepatic insufficiency regardless of the cause of liver disease. Clinical signs are widely variable but represent manifestations of augmented neuronal inhibition. The syndrome occurs in patients with advanced, decompensated liver disease of all types and may be a feature of acute, subacute, or chronic hepatocellular failure. The pathogenesis of hepatic encephalopathy is unclear and most likely multifactorial. The condition is believed to be caused by neurotoxins or agents capable of acting as false neurotransmitters that accumulate in the blood during hepatic insufficiency. This article focuses on equine hepatic encephalopathy by discussing the clinical signs and diagnosis of liver disease and hepatic encephalopathy as well as the proposed causes and treatment of hepatic encephalopathy.