Inflammation of the hepatic parenchyma is primarily the result of cytokine-mediated activation of sinusoidal cells, their expression of leukocyte adhesion molecules, further local release of proinflammatory cytokines, and recruitment of exogenous leukocytes. The Kupffer cell plays a key role in promoting parenchymal inflammation. Sinusoidal endothelial cells, perisinusoidal stellate (Ito) cells, and pit cells (resident natural killer cells) contribute to the proinflammatory microenvironment, and hepatocytes themselves express adhesion molecules and release proinflammatory cytokines. Exogenous leukocytes, especially neutrophils, T lymphocytes, and circulating macrophages, marginate, adhere to the sinusoidal endothelium, and may enter the parenchymal space. They release additional proinflammatory cytokines and noxious reactive chemical species, creating an injurious local environment. The particular victims are hepatocytes. Cytokine stimulation of the hepatocellular acute phase response commandeers the hepatocyte metabolic machinery, and there is severe disruption of hepatocellular bile formation leading to cholestasis. Moreover, cytokine-stimulated hepatocyte apoptosis may ensue, and microvascular occlusion may engender more extensive ischemic hepatocellular necrosis. Counteracting downregulatory mechanisms have been documented but are minimal in both number and apparent impact. Many of these insights have been gained using experimental models of sepsis and endotoxemia, and such models are highlighted in this review.