Liver failure is a severe clinical syndrome with a poor prognosis. Mesenchymal stem cell (MSC) transplantation has emerged as a new intervention in treating liver failure. It is conventionally recognized that MSCs exert their therapeutic effect mainly through transdifferentiation. Recently, published articles have shown that MSCs work in liver failure by secreting trophic and immunomodulatory factors as well as extracellular vesicles (EVs) before transdifferentiation. In particular,MSC-derived EVs have shown similar curative effects as MSCs. Here we review the role of MSCs as well as their derived factors and EVs in liver failure and discuss the use of MSC-derived EVs instead of intact MSCs in treating liver failure.Electronic supplementary materialThe online version of this article (doi:10.1186/s13287-017-0576-4) contains supplementary material, which is available to authorized users.