Pediatric Acute Liver Failure (PALF) is a rapidly progressive clinical syndrome encountered in the pediatric ICU which may rapidly progress to multi-organ dysfunction, and on occasion to life threatening cerebral edema and hemorrhage. Pediatric Acute Liver Failure is defined as severe acute hepatic dysfunction accompanied by encephalopathy and liver-based coagulopathy defined as prolongation of International Normalized Ratio (INR) >1.5. However, coagulopathy in PALF is complex and warrants a deeper understanding of the hemostatic balance in acute liver failure. Although an INR value of >1.5 is accepted as the evidence of coagulopathy and has historically been viewed as a prognostic factor of PALF, it may not accurately reflect the bleeding risk in PALF since it only measures procoagulant factors. Paradoxically, despite the prolongation of INR, bleeding risk is lower than expected (around 5%). This is due to “rebalanced hemostasis” due to concurrent changes in procoagulant, anticoagulant and fibrinolytic systems. Since the liver is involved in both procoagulant (Factors II, V, IX, XI, and fibrinogen) and anticoagulant (Protein C, Protein S, and antithrombin) protein synthesis, PALF results in “rebalanced hemostasis” or even may shift toward a hypercoagulable state. In addition to rebalanced coagulation there is altered platelet production due to decreased thrombopoietin production by liver, increased von Willebrand factor from low grade endothelial cell activation, and hyperfibrinolysis and dysfibrinogenemia from altered synthetic liver dysfunction. All these alterations contribute to the multifactorial nature of coagulopathy in PALF. Over exuberant use of prophylactic blood products in patients with PALF may contribute to morbidities such as fluid overload, transfusion-associated lung injury, and increased thrombosis risk. It is essential to use caution when using INR values for plasma and factor administration. In this review we will summarize the complexity of coagulation in PALF, explore “rebalanced hemostasis,” and discuss the limitations of current coagulation tests. We will also review strategies to accurately diagnose the coagulopathy of PALF and targeted therapies.