Liver disease is one of the leading causes of death worldwide. Patients with cirrhosis display an increased predisposition to and mortality from infection due to multimodal defects in the innate immune system; however, the causative mechanism has remained elusive. We present evidence that the cyclooxygenase (COX)-derived eicosanoid prostaglandin E2 (PGE2) drives cirrhosis-associated immunosuppression. We observed elevated circulating concentrations (more than seven times as high as in healthy volunteers) of PGE2 in patients with acute decompensation of cirrhosis. Plasma from these and patients with end-stage liver disease (ESLD) suppressed macrophage proinflammatory cytokine secretion and bacterial killing in vitro in a PGE2-dependent manner via the prostanoid type E receptor-2 (EP2), effects not seen with plasma from patients with stable cirrhosis (Child-Pugh score grade A). Albumin, which reduces PGE2 bioavailability, was decreased in the serum of patients with acute decompensation or ESLD (<30 mg/dl) and appears to have a role in modulating PGE2-mediated immune dysfunction. In vivo administration of human albumin solution to these patients significantly improved the plasma-induced impairment of macrophage proinflammatory cytokine production in vitro. Two mouse models of liver injury (bile duct ligation and carbon tetrachloride) also exhibited elevated PGE2, reduced circulating albumin concentrations and EP2-mediated immunosuppression. Treatment with COX inhibitors or albumin restored immune competence and survival following infection with group B Streptococcus. Taken together, human albumin solution infusions may be used to reduce circulating PGE2 levels, attenuating immune suppression and reducing the risk of infection in patients with acutely decompensated cirrhosis or ESLD.