Arginine vasopressin is a naturally occurring peptide with established physiological functions acting as a vasoconstrictor through V1 receptors or an aquagenic agent allowing free water retention through V2 receptors in the kidney. Portal haemodynamic changes of chronic liver disease are responsible for the lethal consequences of cirrhosis – bleeding oesophageal varices and hepatorenal syndrome. Increasing hepatic vascular resistance to blood flow coupled with central hypovolaemia and a hyperdynamic circulation driven by changes in nitric oxide responsiveness disturbs the normal circulatory physiology raising portal pressure. Vasopressin and its analogues are potent vasoconstrictors and can be utilised in the management of the complications of cirrhosis. Hyponatraemia is common in end stage liver disease due in part to sodium retention and a decreased free water clearance. Diuretic therapy often leads to a worsening of the sodium status and have little true effect on improving free water clearance. Recently a new class of drugs, V2 receptor antagonists, have been evaluated in chronic liver disease whereby increasing free water clearance they may reduce ascitic fluid development. This review addresses the pharmacology of both vasopressin agonists and antagonists, their clinical application and future potential roles in managing patients with acute on chronic liver failure.