Background: Hepatic encephalopathy has a negative effect on patient health-related quality of life. Apart from increased blood ammonia, alterations in various other substances (Tumor necrosis Factor- Alpha (TNF-α), Ghrelin)have been implicated in the pathogenesis of hepatic encephalopathy (HE). Ghrelin and TNF-alpha have numerous metabolic actions. Aim of the work: was to estimate the role of TNF -α, Ghrelin and Evoked Potentials changes in patients with hepatic encephalopathy, and their relation to grades of hepatic encephalopathy Methods: We measured serum levels of TNF -α, Ghrelin in 40 patients with liver cirrhosis (20 with hepatic encephalopathy & 20 without encephalopathy) and 10 healthy controls. All subjects underwent to neurophysiological test: p300,visual and auditory evoked potentials. Results: The results of this study showed highly significant increase in TNF -α, Ghrelin & levels in both groups when compared to the control group with a significant increase in the cirrhotic encephalopathic group. Also significant correlation between TNF-α, Ghrelin & grading of encephalopathy was found. Delay in latency and decrease amplitude of VEP, p 300 and ABR were significant in cirrhotic patients with hepatic encephalopathy. Conclusion: TNF -α, Ghrelin levels are sensitive indicators of the severity of liver disease. Patients with liver cirrhosis can be followed up by measurement of these serum markers which might predict the development of encephalopathy. The increasing levels of Ghrelin & TNF-α is more prominent in cirrhosis with encephalopathy. The presence of nutritional and metabolic abnormalities, including malnutrition in cirrhosis, at least partly, elucidates high Ghrelin level. The applied neurophysiological tests are a simple, suitable and objective method for differentiating the degrees of encephalopathy and for identifying the preclinical stage of encephalopathy because abnormalities in these tests may prompt the clinician to initiate treatment.