Background: Non-selective β-blockers (NSBB) are frequently used for the treatment of portal hypertension and gastroesophageal varices in patients with liver cirrhosis; however prospective studies investigating the potential association between NSBB use and hepatic encephalopathy (HE) are still scarce. We investigated the potential association between NSBB use and the presence of covert HE (CHE) as well as the development of overt HE (OHE). Methods: 224 patients with liver cirrhosis were included into this cohort study at two German centers and followed for a median of 364 days. CHE was diagnosed by pathological results in the PHES. Predictors for the presence of CHE or the development of OHE were analyzed using logistic-regression or cox-regression models. Results: 39% of patients were treated with NSBB and CHE was detected in 34% of patients at study inclusion. In logistic regression analysis, NSBB use, higher MELD score and a history of OHE were independently associated with the presence of CHE. Cumulative incidence of OHE was considerably higher in NSBB users than in non-users (p<0.001). In Cox-regression models NSBB use, presence of CHE, lower albumin and higher MELD score were independently associated with the development of OHE in the whole cohort as well as in the subgroup of patients with decompensated liver cirrhosis. NSBB use was independently associated with higher risk of mortality or need for liver transplantation in decompensated patients but not in the total cohort. Conclusion: NSBB use seems to be associated with the presence of CHE as well as the development of OHE in patients with decompensated liver cirrhosis.