Acute-on-chronic liver failure (ACLF) is a severe, life-threatening complication, and new and efficient therapeutic strategies for liver failure are urgently needed. Mesenchymal stem cell (MSC) transfusions have been shown to reverse fulminant hepatic failure in mice and to improve liver function in patients with end-stage liver diseases. We assessed the safety and initial efficacy of umbilical cord-derived MSC (UC-MSC) transfusions for ACLF patients associated with hepatitis B virus (HBV) infection. A total of 43 ACLF patients were enrolled for this open-labeled and controlled study; 24 patients were treated with UC-MSCs, and 19 patients were treated with saline as controls. UC-MSC therapy was given three times at 4-week intervals. The liver function, adverse events, and survival rates were evaluated during the 48-week or 72-week follow-up period. No significant side effects were observed during the trial. The UC-MSC transfusions significantly increased the survival rates in ACLF patients; reduced the model for end-stage liver disease scores; increased serum albumin, cholinesterase, and prothrombin activity; and increased platelet counts. Serum total bilirubin and alanine aminotransferase levels were significantly decreased after the UC-MSC transfusions. UC-MSC transfusions are safe in the clinic and may serve as a novel therapeutic approach for HBV-associated ACLF patients.