Subclinical hepatic encephalopathy (SHE) is assumed to have a negative effect on patients' daily functioning; therefore, treatment is recommended. However, no studies have been performed that document the clinical relevance of SHE. We performed a study in which the prevalence of SHE was determined in 179 outpatients with cirrhosis using two psychometric tests (Number Connection Test Part A [NCT-A] and the Digit Symbol Test [DGT]) and automated analysis of the electroencephalogram (EEG). SHE was defined by the presence of at least one abnormal psychometric test and/or abnormal slowing of the EEG. The influence of cirrhosis and SHE on patients' daily functioning was assessed using the Sickness Impact Profile (SIP) questionnaire. The distribution of SIP scores of the patients with cirrhosis differed from the reference scores of the general population. Patients with cirrhosis and SHE (n = 48) reported significantly more impairment in all 12 scales of the SIP, in the psychosocial subscore, the physical subscore, as well as in the total SIP score, compared with cirrhotic patients without SHE (n = 131). Multivariate analysis taking into account severity of liver disease (Child-Pugh score), presence of varices, and alcoholic etiology, showed that SHE independently was related to a diminished total SIP score. The reproducibility of the SIP was high when the test was repeated after a 3-month period. We conclude that SHE implies impaired daily functioning and warrants attempts at treatment.