Background & Aims: The relationship between acute-on-chronic liver failure (ACLF) and acute variceal bleeding (AVB) is poorly understood. Specifically, the prevalence and prognosis of ACLF in the context of AVB is unclear, while the role of transjugular intrahepatic portosystemic shunt (TIPS) in the management in patients with ACLF has not been described to date. Methods: A multicenter, international, observational study was conducted in 2,138 patients from 34 centers between 2011 and 2015. ACLF was defined and graded according to the EASL-CLIF consortium definition. Placement of pre-emptive TIPS (pTIPS) was based on individual center policy. Patients were followed-up for 1 year, until death or liver transplantation. Cox regression and competing risk models (Gray's test) were used to identify independent predictors of rebleeding or mortality. Results: At admission, 380/2,138 (17.8%) patients had ACLF according to EASL-CLIF criteria (grade 1: 38.7%; grade 2: 39.2%; grade 3: 22.1%). The 42-day rebleeding (19% vs. 10%; p <0.001) and mortality (47% vs. 10%; p <0.001) rates were higher in patients with ACLF and increased with ACLF grades. Of note, the presence of ACLF was independently associated with rebleeding and mortality. pTIPS placement improved survival in patients with ACLF at 42 days and 1 year. This effect was also observed in propensity score matching analysis of 66 patients with ACLF, of whom 44 received pTIPs and 22 did not. Conclusions: This large multicenter international real-life study identified ACLF at admission as an independent predictor of rebleeding and mortality in patients with AVB. Moreover, pTIPS was associated with improved survival in patients with ACLF and AVB. Lay summary: Acute variceal bleeding is a deadly complication of liver cirrhosis that results from severe portal hypertension. This study demonstrates that the presence of acute-on-chronic liver failure (ACLF) is the strongest predictor of mortality in patients with acute variceal bleeding. Importantly, patients with ACLF and acute variceal (re)bleeding benefit from pre-emptive (early) placement of a transjugular intrahepatic portosystemic shunt.