BACKGROUND Renal dysfunction is a common complication of cirrhosis, occurring in approximately 20 % of all hospitalized patients with cirrhosis and associated with increased mortality. In about two thirds of the patients, renal dysfunction is caused by prerenal disorders (e.g. gastrointestinal bleeding, diuretics, bacterial infection); one third is caused by intrarenal diseases (e.g. hepatitis associated glomerulonephritis). In most patients, prerenal failure can be successfully handled by volume therapy. In one third, volume replacement is not effective any more to improve kidney function. This kind of prerenal failure is called hepatorenal syndrome (HRS). METHODS The pathophysiology is based on an increased splanchic vasodilation, which cannot be compensated any more by an increased cardiac output. Therefore, patients with cardiac insufficiency are more at risk of developing HRS. The decompensation leads to a stimulation of the baroreceptors with consecutive activation of the sympathetic nerve system, the renin-angiotensin-aldosteron system (RAAS), and nonosmotic release of vasopressin. This results in renal vasoconstriction, which is strengthened by the activation of hepatorenal reflex secondary to an increase in intrahepatic pressure and/or decrease in sinusoidal blood flow. METHODS Several studies have shown that the vasopressin analogue terlipressin combined with albumin can reverse HRS in up to 50 % of patients. Long-term survival can only be achieved by liver transplantation. Improving kidney function before transplantation improves outcome after transplantation.