Numerous studies over the last decade have demonstrated that renal dysfunction and worsening renal function (WRF) are common in patients hospitalized for heart failure (HHF) and appear to be associated with poor in-hospital and post-discharge outcomes. Unfortunately, its etiology has not been completely understood, and its prediction during hospitalization remains challenging. The evaluation of renal impairment during hospitalization should take into consideration the underlying renal substrate (e.g., predisposing clinical comorbidities such as diabetes and hypertension), initiating mechanisms (e.g., in-hospital therapies such as diuretics), and amplifying factors (neurohormonal and hemodynamic profile changes). Various patterns of WRF may have different prognostic implications and may require different therapeutic approaches. WRF may be initially classified by duration (transient vs. persistent) and by etiology (elevated venous pressures vs. arterial underfilling). Other critical contributing factors during hospitalization include progressive left ventricular dysfunction, neurohormonal activation, and medications. Transient WRF as a result of aggressive therapy targeting congestion may not be associated with poor outcomes. Persistent WRF seen in patients with severe hemodynamic derangements may be associated with poor post-discharge prognosis. Future investigations must clarify the pathophysiological correlates of various patterns of WRF. To date, there is an unmet clinical need to achieve adequate control over congestion while preserving renal function in HHF patients. Thus, the aim of this review is to provide an in-depth and critical interpretation of the available data on the prognostic importance of RD and WRF during hospitalization in an effort to improve HF management.