Toll-like receptor 4 (TLR4) plays an essential role in mediating organ injury in acute liver failure (ALF) and acute-on-chronic liver failure (ACLF). Herein, we assess whether inhibiting TLR4 signaling can ameliorate liver failure and serve as a potential treatment. Circulating TLR4 ligands and hepatic TLR4 expression were measured in plasma samples and liver biopsies from patients with cirrhosis. TAK-242 (TLR4 inhibitor) was tested in vivo (10 mg/kg intraperitoneally) in rodent models of ACLF (bile duct ligation + lipopolysaccharide [LPS]; carbon tetrachloride + LPS) and ALF (galactosamine + LPS) and in vitro on immortalized human monocytes (THP-1) and hepatocytes (HHL5). The in vivo therapeutic effect was assessed by coma-free survival, organ injury and cytokine release and in vitro by measuring IL-6, IL-1β or cell injury (TUNEL), respectively. In patients with cirrhosis, hepatic TLR4 expression was upregulated and circulating TLR4 ligands were increased (p <0.001). ACLF in rodents was associated with a switch from apoptotic cell death in ALF to non-apoptotic forms of cell death. TAK-242 reduced LPS-induced cytokine secretion and cell death (p = 0.002) in hepatocytes and monocytes in vitro. In rodent models of ACLF, TAK-242 administration improved coma-free survival, reduced the degree of hepatocyte cell death in the liver (p <0.001) and kidneys (p = 0.048) and reduced circulating cytokine levels (IL-1β, p <0.001). In a rodent model of ALF, TAK-242 prevented organ injury (p <0.001) and systemic inflammation (IL-1β, p <0.001). This study shows that TLR4 signaling is a key factor in the development of both ACLF and ALF; its inhibition reduces the severity of organ injury and improves outcome. TAK-242 may be of therapeutic relevance in patients with liver failure. Toll-like receptor 4 (or TLR4) mediates endotoxin-induced tissue injury in liver failure and cirrhosis. This receptor sensitizes cells to endotoxins, which are produced by gram-negative bacteria. Thus, inhibiting TLR4 signaling with an inhibitor (TAK-242) ameliorates organ injury and systemic inflammation in rodent models of acute and acute-on-chronic liver failure.