Chronic liver disease results from a variety of causes such as hepatitis virus infections, autoimmune processes and alcohol consumption. Its complications include fat deposition, hemodynamic changes and fibrosis. Clinically there may be progression to portal-hypertension and porto-systemic encephalopathy. Pioneering research from the laboratory of Kunos at NIH has stressed the importance of endocannabinoids (ECs) as mediators of some of the pathological processes in chronic liver disease. The present review summarizes the literature on the association between ECs and liver disease, as well as the therapeutic potential of ECs and exogenous cannabinoids in liver disease with emphasis on hepatic encephalopathy.