The administration of mesenchymal stem cells (MSCs) as a therapy for liver disease holds great promise. MSCs can differentiate into hepatocytes, reduce liver inflammation, promote hepatic regeneration and secrete protective cytokines. However, the risks of iatrogenic tumor formation, cellular rejection and infusional toxicity in MSC transplantation remain unresolved. Accumulating evidence now suggests that a novel cell-free therapy, MSC-secreted exosomes, might constitute a compelling alternative because of their advantages over the corresponding MSCs. They are smaller and less complex than their parent cells and, thus, easier to produce and store, they are devoid of viable cells, and they present no risk of tumor formation. Moreover, they are less immunogenic than their parent cells because of their lower content in membrane-bound proteins. This paper reviews the biogenesis of MSC exosomes and their physiological functions, and highlights the specific biochemical potential of MSC-derived exosomes in restoring tissue homeostasis. In addition, we summarize the recent advances in the role of exosomes in MSC therapy for various liver diseases, including liver fibrosis, acute liver injury and hepatocellular carcinoma. This paper also discusses the potential challenges and strategies in the use of exosome-based therapies for liver disease in the future.