Brain edema and associated increase in intracranial pressure continue to be lethal complications of acute liver failure (ALF). Abundant evidence suggests that the edema in ALF is largely cytotoxic brought about by swelling of astrocytes. Elevated blood and brain ammonia levels have been strongly implicated in the development of the brain edema. Additionally, inflammation and sepsis have been shown to contribute to the astrocyte swelling/brain edema in the setting of ALF. We posit that ammonia initiates a number of signaling events, including oxidative/nitrative stress (ONS), the mitochondrial permeability transition (mPT), activation of the transcription factor (NF-κB) and signaling kinases, all of which have been shown to contribute to the mechanism of astrocyte swelling. All of these factors also impact ion-transporters, including Na(+), K(+), Cl(-) cotransporter and the sulfonylurea receptor 1, as well as the water channel protein aquaporin-4 resulting in a perturbation of cellular ion and water homeostasis, ultimately resulting in astrocyte swelling/brain edema. All of these events are also potentiated by inflammation. This article reviews contemporary knowledge regarding mechanisms of astrocyte swelling/brain edema formation which hopefully will facilitate the identification of therapeutic targets capable of mitigating the brain edema associated with ALF.