Hepatic encephalopathy (HE) is an important complication of decompensated liver disease. Hospital admission for episodes of HE are very common, with these patients being managed by the hospitalists. These admissions are costly and burdensome to the health‐care system. Diagnosis of HE at times is not straightforward, particularly in patients who are altered and unable to provide any history. Precipitants leading to episodes of HE, should be actively sought and effectively tackled along with the overall management. This mandates timely diagnostics, appropriate initiation of pharmacological treatment, and supportive care. Infections are the most important precipitants leading to HE and should be aggressively managed. Lactulose is the front‐line medication for primary treatment of HE episodes and for prevention of subsequent recurrence. However, careful titration in the hospital setting along with the appropriate route of administration should be established and supervised by the hospitalist. Rifaximin has established its role as an add‐on medication, in those cases where lactulose alone is not working. Overall effective management of HE calls for attention to guideline‐directed nutritional requirements, functional assessment, medication reconciliation, patient education/counseling, and proper discharge planning. This will potentially help to reduce readmissions, which are all too common for HE patients. Early specialty consultation may be warranted in certain conditions. Numerous challenges exist to optimal care of hospitalized OHE patients. However, hospitalists if equipped with knowledge about a systematic approach to taking care of these frail patients are in an ideal position to ensure good inpatient and transition of care outcomes.