It is generally accepted that astrocyte swelling forms the major anatomic substrate of the edema associated with acute liver failure (ALF) and that ammonia represents a major etiological factor in its causation. The mechanisms leading to such swelling, however, remain elusive. Recent studies have invoked the role of oxidative stress in the mechanism of hepatic encephalopathy (HE), as well as in the brain edema related to ALF. This article summarizes the evidence for oxidative stress as a major pathogenetic factor in HE/ALF and discusses mechanisms that are triggered by oxidative stress, including the induction of the mitochondrial permeability transition (MPT) and activation of signaling kinases. We propose that a cascade of events initiated by ammonia-induced oxidative stress results in cell volume dysregulation leading to cell swelling/brain edema. Blockade of this cascade may provide novel therapies for the brain edema associated with ALF.