Acute kidney injury (AKI) is present in 30%-40% of hospitalized patients with cirrhosis. Its incidence is higher in patients with severe alcoholic hepatitis, spontaneous bacterial peritonitis, and acute-on-chronic-liver failure (ACLF). Kidney injury is an important landmark event in the natural history of cirrhosis as it is associated with higher mortality. Overwhelming systemic vasodilation, cardiac dysfunction, hypoperfusion, endotoxemia, and direct nephrotoxicity predispose patients with cirrhosis to kidney injury. Infection is present in 25% of patients with decompensated cirrhosis and 35%-40% of patients with ACLF. Advanced cirrhosis with portal hypertension leads to a sluggish portal flow, leading to increased gut congestion, altered gut permeability and bacterial translocations. They drive infection and endotoxemia in such patients. Pathogen-associated molecular patterns activate inflammatory cascades, which leads to further deterioration in hemodynamics and reduced glomerular filtration rate. Infections and pro-inflammatory cytokines like interleukin 6 (IL-6), IL-1, and tumor necrosis factor alpha may directly cause kidney parenchymal injury. The combined effect of dysfunctional albumin and systemic and splanchnic vasodilatation leads to low effective blood volume, activating the renin-angiotensin-aldosterone system. This causes renal vasoconstriction, water retention, and ascites, which progresses to hepatorenal physiology and AKI development. Vasoconstriction and volume expansion effectively improve arterial blood volume and systemic hemodynamics, thereby improving renal blood flow. It is of paramount importance to predict, detect, and treat AKI in its early state, as progressive renal dysfunction is invariably associated with higher mortality in patients with decompensated cirrhosis and ACLF. This comprehensive review will focus on the recent evolving concepts of the pathophysiology, diagnosis, and management of AKI in patients with cirrhosis.