Hepatic encephalopathy (HE) is an important component of hepatic decompensation, which reduces survival in patients with cirrhosis. The Model for End-Stage Liver Disease (MELD) score has been used to predict survival of patients with cirrhosis. The aims of this study were to determine whether HE is a predictor of survival of patients with cirrhosis and to examine the degree to which HE may add to the survival prediction of MELD. Patients with end-stage liver disease whose data were included in 2 databases were included in the analysis: 223 patients undergoing transjugular intrahepatic portosystemic shunt (TIPS) insertion, and 271 patients hospitalized with hepatic decompensation. In univariate analysis, HE grade 3 or higher was associated with a 3.7-fold (95% confidence interval, 1.9–7.3, P < 0.01) increase in the risk of death in the TIPS patients and HE grade 2 or higher was associated 3.9-fold increase (95% confidence interval [95% CI], 2.6–5.7, P < 0.01) in hospitalized patients. As expected, MELD and Child-Turcotte-Pugh scores (with and without HE included) were also markedly associated with survival. When HE (grade 2 or higher) and MELD were considered together, HE remained strongly statistically significant in the hospitalized patients (hazard ratio = 2.6, 95% CI, 1.7–3.8, P < 0.01). The effect became smaller in the TIPS patients (hazard ratio = 1.1; 95% CI, 0.7–1.6, P = 0.76). In conclusion, this retrospective study demonstrates that HE is an important event in the natural history of cirrhosis that affects subsequent survival of patients. HE may provide additional prognostic information independent of MELD, which warrants prospective validation. Liver Transpl, 2007. © 2007 AASLD.