Bacterial infections, most commonly spontaneous bacterial peritonitis in patients with ascites, occur in one third of admitted patients with cirrhosis, and account for a 4-fold increase in mortality. Bacteria are isolated from less than 40% of ascites infections by culture, necessitating empirical antibiotic treatment, but culture-independent studies suggest bacteria are commonly present, even in the absence of overt infection. Widespread detection of low levels of bacteria in ascites, in the absence of peritonitis, suggests immune impairment may contribute to higher susceptibility to infection in cirrhotic patients. However, little is known about the role of ascites leukocyte composition and function in this context. We determined ascites bacterial composition by quantitative PCR and 16S rRNA gene sequencing in 25 patients with culture-negative, non-neutrocytic ascites, and compared microbiological data with ascites and peripheral blood leukocyte composition and phenotype. Bacterial DNA was detected in ascitic fluid from 23 of 25 patients, with significant positive correlations between bacterial DNA levels and poor 6-month clinical outcomes (death, readmission). Ascites leukocyte composition was variable, but dominated by macrophages or T lymphocytes, with lower numbers of B lymphocytes and natural killer cells. Consistent with the hypothesis that impaired innate immunity contributes to susceptibility to infection, high bacterial DNA burden was associated with reduced major histocompatibility complex class II expression on ascites (but not peripheral blood) monocytes/macrophages. These data indicate an association between the presence of ascites bacterial DNA and early death and readmission in patients with decompensated cirrhosis. They further suggest that impairment of innate immunity contributes to increased bacterial translocation, risk of peritonitis, or both.