Acute liver failure (ALF) shares striking similarities with septic shock with regard to the features of systemic inflammation, progression to multiple organ dysfunction and functional immunoparesis. While the existence of opposing systemic pro- and anti-inflammatory profiles resulting in organ failure and immune dysfunction are well recognised in septic shock, characterization of these processes in ALF has only recently been described. This review explores the evolution of the systemic inflammation in acute liver failure, its relation to disease progression, exacerbation of liver injury and development of innate immune dysfunction and extra-hepatic organ failure as sequelae. Defects in innate immunity are described in hepatic and extra-hepatic compartments. Clinical studies measuring levels of pro- and anti-inflammatory cytokines and expression of the antigen presentation molecule HLA-DR on monocytes, in combination with ex-vivo experiments, demonstrate that the persistence of a compensatory anti-inflammatory response syndrome, leading to functional monocyte deactivation, is a central event in the evolution of systemic immune dysfunction. Accurate immune profiling in ALF may permit the development of immunomodulatory strategies in order to improve outcome in this condition.