Mortality in patients with alcoholic hepatitis (AH) remains high, and although corticosteroids are widely used for treatment, the results vary considerably. In AH, neutrophils are primed and infiltrate the liver to produce injury, but paradoxically, the main cause of death in such patients is infection. Our prospective study addressed this paradox of primed neutrophils on the one hand and increased risk of infection on the other. We hypothesized that the full activation of neutrophils by a humoral factor such as endotoxin renders them unable to respond to further bacterial challenge. We analyzed neutrophil oxidative burst and phagocytosis in whole blood by fluorescence-activated cell sorting analysis in 63 alcoholic patients with cirrhosis and patients with cirrhosis with superimposed AH (cirrhosis؉AH). In 16 patients, ex vivo studies determined whether the removal of endotoxin restored neutrophil function. A resting burst greater than or equal to 5%, indicating neutrophil activation and a reduced phagocytic capacity lower than 42%, was associated with significantly greater risk of infection, organ failure, and mortality. This defective neutrophil function was transmissible through patients' plasma to normal neutrophils, and patients' neutrophil function could be restored by normal plasma. The ex vivo removal of endotoxin from patients' plasma decreased the resting burst and increased the phagocytic function. Conclusions: Our study provides the rationale for a goal-directed approach to the management of patients with cirrhosis and AH, in which the assessment of neutrophil function may be an important biomarker to select patients for immunosuppressive therapy. The neutrophil dysfunction in cirrhosis and AH is reversible, with endotoxin-removal strategies providing new targets for intervention. (HEPATOLOGY 2007;46:831-840.)