Chronic portosystemic encephalopathy (CPSE) resulting from portosystemic shunts (PSS) is a devastating clinical problem. When CPSE is refractory to medical treatment, occlusion of the PSS should be considered. We report a case of CPSE due to a huge paraumbilical vein shunt that was successfully treated with laparoscopic disconnection. A 54-year-old woman diagnosed with liver cirrhosis was referred to our department for treatment of hepatic encephalopathy. She had repeatedly experienced episodes of disturbance of consciousness, and had hyperammoniemia refractory to medical treatment. Computed tomography showed a huge patent paraumbilical vein connected to the systemic circulation through the round ligament. Laparoscopic disconnection of the paraumbilical vein shunt was performed. The postoperative course was uncomplicated and there has been no recurrence of hepatic encephalopathy in the 2 years since, nor has there been a need for further medical treatment. We believe this is the first case report of CPSE treated laparoscopically, and it demonstrates that laparoscopic disconnection of PSS, especially paraumbilical vein shunts, can be a safe and effective procedure to treat CPSE.