Sepsis-associated encephalopathy (SAE) is defined as a syndrome of cerebral dysfunction secondary to sepsis but in the absence of direct central nervous system infection, structural abnormality, or other types of encephalopathy. The majority of clinical studies indicated that the severity and duration of SAE were highly related to the days of ICU stays, medical costs, and mortality of sepsis. Meanwhile, the persistence of cognitive impairments and psychological diseases in a majority of survived septic patients brings a heavy burden on those individuals and society. However, the pathogenesis of SAE has not been fully elucidated. A valid and unified diagnosis protocol, as well as effective remedy are still absent. The purpose of this narrative review is to discuss and update the current understanding of the clinical manifestations and risk factors, the recent findings and potential perspectives for the mechanism research, diagnostic methods, and treatments for SAE.