Hepatic encephalopathy (HE) is a surrogate marker of liver disease severity, and more severe HE is associated with higher mortality among patients with chronic liver disease. However, whether severity of HE at the time of liver transplantation (LT) directly impacts post‐LT survival or whether this suspected mortality linkage is due to more severe liver disease and subsequently higher rates of post‐LT infection is not well defined. Using population‐based data from the 2003 to 2013 United Network for Organ Sharing registry, we evaluated the impact of HE at the time of LT on post‐LT survival among adults in the United States. Survival was stratified by HE severity (none, grade 1‐2, grade 3‐4) and Model for End‐Stage Liver Disease score and was evaluated using Kaplan‐Meier methods and multivariate Cox proportional hazards models. From 2003 to 2013, 59,937 patients underwent LT (36.1%, no HE; 53.8%, grade 1‐2 HE; 10.2%, grade 3‐4 HE). Compared to no HE, patients with grade 3‐4 HE had significantly lower overall post‐LT survival (1‐year, 82.5% versus 90.3%; P < 0.001; 5‐year, 69.1% versus 74.4%; P < 0.001). On multivariate regression, grade 3‐4 HE was independently associated with lower overall post‐LT survival (HR, 1.27; 95% CI, 1.17‐1.39; P < 0.001). However, the increased mortality associated with HE is observed primarily within the first year following LT and was a reflection of higher rates of infection‐related deaths among patients with more severe HE. In conclusion, grade 3‐4 HE at the time of LT is associated with lower post‐LT survival, with a proposed direct or indirect association of more severe HE before LT with increased rates of post‐LT infections. Increased awareness and vigilance toward treating HE before LT and more aggressive monitoring and treatment for infections in the perioperative setting may improve LT outcomes. Liver Transpl 21:873‐880, 2015. © 2015 AASLD.