Acute-on-chronic liver failure (ACLF) is an important syndrome of liver failure that has a high risk of short-term mortality in patients with chronic liver disease. The development of ACLF is associated with proinflammatory precipitating events, such as infection, alcoholic hepatitis, and intense systemic inflammation. Recently, the role of the gut microbiome has increasingly emerged in human health and disease. Additionally, the gut microbiome might have a major role in the development of liver disease. In this review, we examine evidence to support the role of gut dysbiosis in cirrhosis and ACLF. Additionally, we explore the mechanism by which the gut microbiome contributes to the development of ACLF, with a focus on alcohol-induced liver disease.