Hepatic encephalopathy (HE) is a complex neuropsychiatric syndrome that typically develops as a result of acute liver failure or chronic liver disease. Brain edema is a common feature associated with HE. In acute liver failure, brain edema contributes to an increase in intracranial pressure, which can fatally lead to brain stem herniation. In chronic liver disease, intracranial hypertension is rarely observed, even though brain edema may be present. This discrepancy in the development of intracranial hypertension in acute liver failure versus chronic liver disease suggests that brain edema plays a different role in relation to the onset of HE. Furthermore, the pathophysiological mechanisms involved in the development of brain edema in acute liver failure and chronic liver disease are dissimilar. This review explores the types of brain edema, the cells, and pathogenic factors involved in its development, while emphasizing the differences in acute liver failure versus chronic liver disease. The implications of brain edema developing as a neuropathological consequence of HE, or as a cause of HE, are also discussed.