Polycystic liver disease (PLD) is arbitrarily defined as a liver that contains >20 cysts. The condition is associated with two genetically distinct diseases: as a primary phenotype in isolated polycystic liver disease (PCLD) and as an extrarenal manifestation in autosomal dominant polycystic kidney disease (ADPKD). Processes involved in hepatic cystogenesis include ductal plate malformation with concomitant abnormal fluid secretion, altered cell-matrix interaction and cholangiocyte hyperproliferation. PLD is usually a benign disease, but can cause debilitating abdominal symptoms in some patients. The main risk factors for growth of liver cysts are female sex, exogenous oestrogen use and multiple pregnancies. Ultrasonography is very useful for achieving a correct diagnosis of a polycystic liver and to differentiate between ADPKD and PCLD. Current radiological and surgical therapies for symptomatic patients include aspiration-sclerotherapy, fenestration, segmental hepatic resection and liver transplantation. Medical therapies that interact with regulatory mechanisms controlling expansion and growth of liver cysts are under investigation. Somatostatin analogues are promising; several clinical trials have shown that these drugs can reduce the volume of polycystic livers. The purpose of this Review is to provide an update on the diagnosis and management of PLD with a focus on literature published in the past 4 years.