Hepatic encephalopathy (HE), or portosystemic encephalopathy, represents a reversible decrease in neurologic function caused by liver disease, and treatment has traditionally been with non-absorbable disaccharides along with antibiotics and supportive measures. The present study was undertaken to evaluate if their combination therapy were superior to the established therapy in management of HE. Ninety six (96) patients of hepatic encephalopathy were randomly assigned to receive either lactulose and rifaximin in standard dosage or lactulose only and their response to therapy was monitored using standard assessment tools. The statistical analysis was done using Kaplan- Meier methods to estimate the percentage of patients maintaining survival over time. The patients who were on lactulose and placebo revealed to have lower mortality than those on lactulose and rifaximin. Also, improvement in neurological status was of Grade 1 or more was more in patients on lactulose and placebo when compared to those on lactulose and rifaximin. Although survival analysis revealed no statistical difference between two groups, the mean survival in the placebo group was higher. The present study reveals that improvement in neurological status of the group treated with lactulose only was that of a higher percentage than that of the group being treated with lactulose and rifaximin, which reiterates the recommendation that lactulose be used as a first line therapy in overt hepatic encephalopathy (OHE). Also the outcome was better in patients who had a lower grade of encephalopathy on admission.