Background/Objectives: Acute-on-chronic liver failure (ACLF) is a severe syndrome in chronic liver disease (CLD) patients, characterized by multi-organ failure and high mortality. Living donor liver transplantation (LDLT) is vital in donor-scarce areas. This study compares baseline characteristics, perioperative complications, and long-term survival between ACLF and non-ACLF patients, emphasizing etiology, ACLF grading, and graft factors. Methods: Data from a prospective registry of 591 adult LDLT recipients (2019–2023) were analyzed. ACLF was defined by EASL-CLIF (multi-organ failure, grades 1–3) and APASL (jaundice/coagulopathy with complications) criteria, evaluated at initial assessment and within 24 h pre-LDLT. Results: ACLF patients (n = 101, 17.1%) showed higher MELD-Na (27 vs. 20, p < 0.001), bilirubin (6.84 vs. 1.75 mg/dL, p < 0.001), creatinine (108 vs. 70.5 μmol/L, p < 0.001), metabolic/genetic etiologies (9.9% vs. 2.8%, p = 0.001), and chronic kidney disease (23.7% vs. 8.1%, p < 0.001), and lower HCC rates (11.8% vs. 29.6%, p < 0.001). GRWR was marginally lower in ACLF patients (0.59 vs. 0.66, p = 0.10). The ACLF group had elevated infection (27.7% vs. 10.4%, p < 0.001), bleeding (14.9% vs. 6.3%, p = 0.004), and biliary complications (15.8% vs. 7.8%, p = 0.010), with longer ICU (5 vs. 3 days, p < 0.001) and hospital stays (33.66 vs. 20.7 days, p = 0.036). Five-year overall survival was reduced in ACLF patients (log-rank p = 0.001), worsening with grade (EASL-CLIF grade 3: 55% vs. 81% for no ACLF, p = 0.002). Graft survival was also lower (75% vs. 85%, p = 0.02). Multivariable analysis identified chronic kidney disease as an independent mortality predictor (HR 2.09, 95% CI 1.11–3.95, p = 0.023). Conclusions: LDLT for ACLF involves higher perioperative risks and poorer long-term survival than non-ACLF patients, with outcomes deteriorating by ACLF grade. Chronic kidney disease independently predicts mortality. Timely LDLT is essential in donor-limited regions.