Sepsis and septic shock are catastrophic disease entities that portend high mortality in patients with cirrhosis. In cirrhosis, hemodynamic perturbations, immune dysregulation, and persistent systemic inflammation with altered gut microbiota in the background of portal hypertension enhance the risk of infections and resistance to antimicrobials. Patients with cirrhosis develop recurrent life-threatening infections that progress to multiple organ failure. The definition, pathophysiology, and treatment options for sepsis have been ever evolving. In this exhaustive review, we discuss novel advances in the understanding of sepsis, describe current and future biomarkers and scoring systems for sepsis, and delineate newer modalities and adjuvant therapies for the treatment of sepsis from existing literature to extrapolate the same concerning the management of sepsis in cirrhosis. We also provide insights into the role of gut microbiota in initiation and progression of sepsis and finally, propose a treatment algorithm for management of sepsis in patients with cirrhosis.