Acute-on-chronic liver failure (ACLF) is characterized by acute exacerbation of chronic hepatitis, organ failure, high mortality, and poor prognosis. At present, the clinical methods of treatment include comprehensive treatment with medicines, artificial liver system, and orthotopic liver transplantation (OLT), and of these, OLT is considered the most effective treatment for ACLF. However, it is difficult for ACLF patients to benefit from OLT due to the shortage of liver donors, high cost, unpredictable postoperative complications, and long-term use of immunosuppressive drugs; therefore, it is important to explore a new treatment option. With the development of stem cell transplantation technology in recent years, several studies have shown that treatment of ACLF with mesenchymal stem cells (MSCs) leads to higher survival rates, and has good tolerance and safety rates, thereby improving the liver function and quality of life of patients; it has also become one of the popular research topics in clinical trials. This paper summarizes the current clinical interventions and treatments of ACLF, including the clinical trials, therapeutic mechanisms, and research progress on MSC application in the treatment of ACLF. The problems and challenges of the development of MSC-based therapy in the future are also discussed.