Total parenteral nutrition (TPN)-induced liver disease develops in 40-60% of infants who require long-term TPN for intestinal failure. The clinical spectrum includes cholestasis, cholelithiasis, hepatic fibrosis with progression to biliary cirrhosis, and the development of portal hypertension and liver failure in a significant number of children who are totally parenterally fed. The pathogenesis is multifactorial and is related to prematurity, low birth weight, and duration of TPN. The degree and severity of the liver disease is related to recurrent sepsis including catheter sepsis, bacterial translocation, and cholangitis. Lack of enteral feeding leading to reduced gut hormone secretion, reduction of bile flow, and biliary stasis may be important mechanisms in the development of cholestasis, biliary sludge, and cholelithiasis. Although it is unlikely that modern TPN solutions have a major role in the etiology of TPN liver disease, manganese toxicity recently has been recognized in children with hepatic dysfunction on TPN. Although there is a definite relationship with the degree of manganese toxicity and hepatic decompensation, it is not yet clear whether this is a primary mechanism or whether the high levels are related to reduced biliary excretion of manganese. The management strategies for the prevention of TPN-induced liver disease include early enteral feeding, a multidisciplinary approach to the management of parenteral nutrition, and aseptic catheter techniques to reduce sepsis. The administration of ursodeoxycholic acid may improve bile flow and reduce gall bladder and intestinal stasis. As survival from isolated intestinal transplantation improves, this therapeutic option should be considered before TPN liver disease becomes irreversible and combined liver and small bowel transplantation is required.