The prominent role of gut in regulating the physiology of different organs in a human body is increasingly acknowledged, to which the bidirectional communication between gut and liver is no exception. Liver health is modulated via different key components of gut-liver axis. The gut-derived products mainly generated from dietary components, microbial metabolites, toxins, or other antigens are sensed and transported to the liver through portal vein to which liver responds by secreting bile acids and antibodies. Therefore, maintaining a healthy gut microbiome can promote homeostasis of this gut-liver axis by regulating the intestinal barrier function and reducing the antigenic molecules. Conversely, liver secretions also regulate the gut microbiome composition. Disturbed homeostasis allows luminal antigens to reach liver leading to impaired liver functioning and instigating liver disorders. The perturbations in gut microbiome, permeability, and bile acid pool have been associated with several liver disorders, although precise mechanisms remain largely unresolved. Herein, we discuss functional fingerprints of a healthy gut-liver axis while contemplating mechanistic understanding of pathophysiology of liver diseases and plausible role of gut dysbiosis in different diseased states of liver. Further, novel therapeutic approaches to prevent the severity of liver disorders are discussed in this review.