Background & Aims: Rifaximin-α is efficacious for the prevention of recurrent hepatic encephalopathy (HE), but its mechanism of action remains unclear. We postulated that rifaximin-α reduces gut microbiota-derived endotoxemia and systemic inflammation, a known driver of HE. Methods: In a placebo-controlled, double-blind, mechanistic study, 38 patients with cirrhosis and HE were randomised 1:1 to receive either rifaximin-α (550 mg BID) or placebo for 90 days. Primary outcome: 50% reduction in neutrophil oxidative burst (OB) at 30 days. Secondary outcomes: changes in psychometric hepatic encephalopathy score (PHES) and neurocognitive functioning, shotgun metagenomic sequencing of saliva and faeces, plasma and faecal metabolic profiling, whole blood bacterial DNA quantification, neutrophil toll-like receptor (TLR)-2/4/9 expression and plasma/faecal cytokine analysis. Results: Patients were well-matched: median MELD (11 rifaximin-α vs. 10 placebo). Rifaximin-α did not lead to a 50% reduction in spontaneous neutrophil OB at 30 days compared to baseline (p = 0.48). However, HE grade normalised (p = 0.014) and PHES improved (p = 0.009) after 30 days on rifaximin-α. Rifaximin-α reduced circulating neutrophil TLR-4 expression on day 30 (p = 0.021) and plasma tumour necrosis factor-α (TNF-α) (p <0.001). Rifaximin-α suppressed oralisation of the gut, reducing levels of mucin-degrading sialidase-rich species, Streptococcus spp, Veillonella atypica and parvula, Akkermansia and Hungatella. Rifaximin-α promoted a TNF-α- and interleukin-17E-enriched intestinal microenvironment, augmenting antibacterial responses to invading pathobionts and promoting gut barrier repair. Those on rifaximin-α were less likely to develop infection (odds ratio 0.21; 95% CI 0.05-0.96). Conclusion: Rifaximin-α led to resolution of overt and covert HE, reduced the likelihood of infection, reduced oralisation of the gut and attenuated systemic inflammation. Rifaximin-α plays a role in gut barrier repair, which could be the mechanism by which it ameliorates bacterial translocation and systemic endotoxemia in cirrhosis. Clinical Trial Number: ClinicalTrials.gov NCT02019784. Lay summary: In this clinical trial, we examined the underlying mechanism of action of an antibiotic called rifaximin-α which has been shown to be an effective treatment for a complication of chronic liver disease which effects the brain (termed encephalopathy). We show that rifaximin-α suppresses gut bacteria that translocate from the mouth to the intestine and cause the intestinal wall to become leaky by breaking down the protective mucus barrier. This suppression resolves encephalopathy and reduces inflammation in the blood, preventing the development of infection.