Hepatorenal syndrome (HRS) is a common complication of advanced cirrhosis characterized not only by renal failure but also by marked alterations in systemic haemodynamics and activity of endogenous vasoactive systems. Renal failure is due to a severe vasoconstriction of the renal circulation. The pathogenesis of HRS is not completely understood but it is probably the result of extreme underfilling of the arterial circulation secondary to arterial vasodilation located in the splanchnic circulation. As well as the renal circulation, all other extrasplanchnic vascular beds appear to be vasoconstricted. The diagnosis of HRS is currently based on the exclusion of nonfunctional causes of renal failure; prognosis of patients with HRS is very poor. Liver transplantation is the best option in selected patients, but it is not always applicable as survival expectancy is short. Vasoconstrictor drugs with preferential effect on the splanchnic circulation (vasopressin analogues with a predominant V1 receptor effect, such as terlipressin--Glypressin) are very effective in improving renal function, with reversal of HRS being achieved in approximately two-thirds of patients. There is no agreement as to the terlipressin treatment regimen that is associated with a greater efficacy and lower incidence of side-effects. It appears that the administration of albumin together with terlipressin improves the therapeutic response rate. The impact of treatment on the natural course of HRS remains to be assessed in prospective investigations, but it seems that the reversal of HRS is associated with improved survival. Finally, treatment of patients with HRS with terlipressin before transplantation seems to improve post-transplantation outcome.