Dysregulation of the host immune responses induced by host hepatitis B virus (HBV) interactions has been observed in acute-on-chronic liver failure (ACLF). Myeloid-derived suppressor cells (MDSCs), well known for their immunomodulatory properties, can suppress T-cell function by regulating the expression of CD3 zeta chain in cancer and autoimmune/infectious diseases while rarely have been studied in ACLF. In this study, MDSCs, CD4(+)/CD8(+) T cells, and CD3 zeta chain were analyzed by flow cytometry in peripheral blood mononuclear cells obtained from HBV-related ACLF patients, chronic hepatitis B (CHB) patients and healthy controls. ACLF patients were followed up for dynamic detection of MDSCs and observation of outcomes after treatment. Interestingly, peripheral CD14(+)CD33(+)CD11b(+)HLA-DR-/low MDSCs from ACLF patients were significantly increased compared to those from CHB patients and healthy controls. CD4(+)/CD8(+) T cell frequency and CD3 zeta chain expression in T cells were decreased in ACLF patients compared to those of healthy controls and were negatively correlated with matched MDSC frequency. Meanwhile, the frequency of MDSCs was closely correlated with biochemical parameters that are relevant for liver injury rather than virological parameters. Moreover, a lower level of MDSCs was correlated with a better short-term prognosis (within 4 weeks but not at 8 weeks), and MDSCs remained high in ACLF patients whose conditions worsened within a 4-week follow-up period after treatment. These results suggest that MDSCs are closely involved in cell-mediated immunity in HBV-related ACLF and that peripheral MDSC expansion is closely associated with disease severity and progression in HBV-related ACLF, which may serve as a predictor of short-term prognosis.