Inclusion Criteria:

1. Written informed consent by subject or legally authorized representative
2. At least 18 years of age
3. Cirrhosis and ascites
4. Rapidly progressive reduction in renal function characterized by:

* Serum creatinine (SCr) ≥ 2.5 mg/dL
* Doubling of SCr within 2 weeks (or for observations of shorter duration, SCr values over time meeting slope-based criteria for proportional increases likely to be representative of at least a doubling within 2 weeks
5. No sustained improvement in renal function (\< 20% decrease in SCr and SCr ≥ 2.25 mg/dL) 48 hours after both diuretic withdrawal and the beginning of plasma volume expansion with albumin:

Note: Albumin doses recommended by the International Ascites Club (IAC) are 1 g/kg on the first day (Maximum 100 g) and 20 - 40 g/day thereafter as clinically indicated. It is recommended (if clinically appropriate) that the albumin dose is kept constant during the study drug administration period.

Note: The qualifying SCr value is the SCr value at least 48 hrs after both diuretic withdrawal (if applicable) and the beginning of albumin fluid challenge. The qualifying SCr value must be ≥ 2.25 mg/dL AND at least 80% of the diagnostic (pre-fluid challenge) SCr value.

Exclusion Criteria:

1. SCr \> 7 mg/dL
2. Shock Note: Hypotension (Mean Arterial Pressure \< 70 mm Hg or a decrease \> 40 mm Hg in systolic blood pressure from baseline) with evidence of hypoperfusion abnormalities despite adequate fluid resuscitation.
3. Sepsis or systemic inflammatory response syndrome (SIRS)

Note: SIRS: Presence of 2 or more of the following findings:

Temperature \> 38°C or \< 36°C; heart rate \> 90/min; respiratory rate of \> 20/min or a PaCO2 of \< 32 mm Hg; white blood cell count of \> 12,000 cells/µL or \< 4,000/ µL.

Note: Sepsis: Documented infection and systemic inflammatory response syndrome.
4. \< 2 days anti-infective therapy for documented or suspected infection
5. Proteinuria \> 500 mg/day
6. Hematuria or microhematuria (\> 50 red blood cells per high power field)
7. Clinically significant casts on urinalysis, including granular casts Note: Urine sediment examination is required to exclude presence of granular casts and other clinically significant casts \[e.g., red blood cell (RBC) casts\].
8. Evidence of intrinsic or parenchymal renal disease (including acute tubular necrosis)
9. Obstructive uropathy or other renal pathology on ultrasound or other medical imaging
10. Current or recent treatment (within 4 weeks) with nephrotoxic drugs, e.g., aminoglycosides, nonsteroidal anti-inflammatory drugs (NSAID) Note: Up to 3 doses of an NSAID within the prior month (prescription or over the counter) is acceptable Note: Use of short-term (\< 2 weeks) oral neomycin for acute encephalopathy is acceptable.
11. Current or recent (within 4 weeks) renal replacement therapy
12. Superimposed acute liver failure/injury due to factors other than alcoholic hepatitis, including acute viral hepatitis, drugs, medications (e.g., acetaminophen), or other toxins (e.g., mushroom \[Amanita\] poisoning)
13. Current or recent treatment (within 48 hours) with octreotide, midodrine, vasopressin, dopamine or other vasopressors
14. Severe cardiovascular disease as judged by investigator
15. Estimated life expectancy of less than 3 days
16. Confirmed pregnancy
17. Known allergy or sensitivity to terlipressin or another component of the study treatment
18. Participation in other clinical research studies involving the evaluation of other investigational drugs or devices within 30 days of randomization