BACKGROUND: Acute-on-chronic liver failure (ACLF) refers to the acute deterioration of liver function that occurs in patients with chronic liver disease. ACLF is characterized by acute decompensation, organ failure and high short-term mortality. Numerous studies have been conducted and remarkable progress has been made regarding the pathophysiology and pathogenesis of this disease in the last decade. The present review was to summarize the advances in this field. DATA SOURCES: A comprehensive search in PubMed and EMBASE was conducted using the medical subject words "acute-on-chronic liver failure", "ACLF", "pathogenesis", "predictors", and "immunotherapy" combined with free text terms such as "systemic inflammation" and "immune paralysis". Relevant papers published before October 31, 2018, were included. RESULTS: ACLF has two marked pathophysiological features, namely, excessive systemic inflammation and susceptibility to infection. The systemic inflammation is mainly manifested by a significant increase in the levels of plasma pro-inflammatory factors, leukocyte count and C-reactive protein. The underlying mechanisms are unclear and may be associated with decreased immune inhibitory cells, abnormal expression of cell surface molecules and intracellular regulatory pathways in immune cells and increased damage-associated molecular patterns in circulation. However, the main cause of susceptibility to infection is immune paralysis. Immunological paralysis is characterized by an attenuated activity of immune cells. The mechanisms are related to elevations of immune inhibitory cells and the concentration of plasma anti-inflammatory molecules. Some immune biological indicators, such as soluble CD163, are used to explore the pathogenesis and prognosis of the disease, and some immunotherapies, such as glucocorticoids and granulocyte colony-stimulating factor, are effective on ACLF. CONCLUSIONS: Overwhelming systemic inflammation and susceptibility to infection are two key features of ACLF. A better understanding of the state of a patient's immune system will help to guide immunotherapy for ACLF.