In the past few years, there have been important advances in the field of pathogenesis and management of ascites and hepatorenal syndrome in cirrhosis. A new pathogenic theory of ascites and renal dysfunction in cirrhosis has been presented and previously ill-defined conditions, such as refractory ascites and hepatorenal syndrome, have been defined precisely. The link between the diseased liver and the disturbances in renal function and vasoactive systems is not completely known, but a large body of evidence indicates that it consists of a circulatory dysfunction that affects mainly the arterial circulation and is characterized by an inability to maintain an effective arterial blood volume within normal limits. The research on the mechanisms of this circulatory dysfunction will give valuable information in the design of more pathophysiologically oriented therapeutic approaches to the management of ascites.