Background: A serious problem in cirrhosis is acute renal injury. The study aimed to examine the urinary neutrophil gelatinase-associated lipocalin (uNGAL) as a diagnostic and prognostic marker of acute kidney injury (AKI) in cirrhotic patients. Methods: A prospective study was carried out over a period of 1 year. A total of 490 patients suffering from cirrhosis who visited an indoor hospital were screened, and after the exclusion, a total of 90 subjects admitted to the medicine intensive care unit (MICU) fulfilling inclusion criteria were enrolled. Those having a history of renal diseases, on nephrotoxic drugs, in septic shock, peritonitis, UTI, and no urine output were excluded. On admission, for the estimation of uNGAL, urinary levels of sodium, creatinine, fresh urine samples were obtained, and blood samples were taken for serum creatinine estimation. Results: Out of 90 patients, 33.3% did not develop AKI, and 66.7% developed AKI. Urinary neutrophil gelatinase-associated lipocalin levels were six times higher in patients with acute tubular necrosis (259.08 ± 118.41 ng/mL) and three times higher in Hepatorenal syndrome (HRS)-AKI (124.97 ± 16.38) as compared with patients with normal kidney function (39.76 + 5.7). Those who died had a higher uNGAL (171.6 ng/mL) in comparison to those who survived (133.7 ng/mL). At a cutoff value of ≥114.9 (ng/mL), urinary NGAL represents a sensitivity of 86.92% and specificity of 100% to diagnose AKI and AUC 0.966 (95% CI: 0.919–0.990) in cirrhotic patients. Conclusion: Urinary NGAL is good for diagnosing AKI and is a marker to distinguish the types of AKI in liver cirrhosis.