Decompensated cirrhosis marks an irreversible stage in chronic liver disease. Effective etiological treatment may induce hepatic recompensation. We have evaluated the factors which contribute to the improvement of patients with decompensated liver cirrhosis. This review followed a comprehensive literature search using PubMed, Clinical Review, and Google Scholar, focusing on articles, meta-analyses, and references from relevant articles and textbooks published between 2021 and 2024. Our analysis of current literature demonstrates that antiviral therapy and alcohol cessation significantly enhance prognosis and facilitate hepatic recompensation in patients with decompensated cirrhosis. The pathophysiology of recompensation in cirrhosis involves several mechanisms: reduction of liver injury, hepatocyte regeneration, resolution of fibrosis, reduction of portal hypertension, improvement in hemodynamics (decreased cardiac output, splanchnic vasodilation, and improved vascular responsiveness). The patients who achieve HBV DNA levels <20 IU/ml during antiviral therapy experience resolution of ascites, encephalopathy, and absence of recurrent variceal bleeding for at least 12 months. Patients with HCV decompensated liver cirrhosis in case of attaining the sustained virologic response have a great chance for post-treatment recompensation. Further, patients with decompensated alcohol-related cirrhosis achieved recompensation through sustained abstinence. Recompensation has become a significant focus in the study of cirrhosis, especially in cases of chronic liver disease with known causes like viral hepatitis and alcohol consumption. Achieving recompensation in patients with virus- and alcohol-related cirrhosis is promising, but more studies are needed to understand its underlying mechanisms and clinical characteristics.