Abstract Impairment of kidney function is common in acute‐on‐chronic liver failure (ACLF). Patterns of kidney dysfunction and their impact on kidney and patient outcomes are ill‐defined. Aims of the current study were to investigate patterns of kidney dysfunction and their impact on kidney and patient outcomes in patients with acute decompensation (AD) of cirrhosis, with or without ACLF. This prospective study includes 639 admissions for AD (232 with ACLF; 407 without) in 518 patients. Data were collected at admission and during hospitalization, and patients were followed up for 3 months. Urine samples were analyzed for kidney biomarkers. Most patients with ACLF (92%) had associated acute kidney injury (AKI), in most cases without previous chronic kidney disease (CKD), whereas some had AKI‐on‐CKD (70% and 22%, respectively). Prevalence of AKI in patients without ACLF was 35% (p