The purpose of this review is to describe the immune function of the liver, guiding the reader from the homeostatic tolerogenic status to the aberrant activation demonstrated in chronic liver disease. An extensive description of the pathways behind the inflammatory modulation of the healthy liver will be provided focusing on the complex immune cell network residing within the liver. The limit of tolerance will be presented in the context of organ transplantation, seizing the limits of homeostatic mechanisms that fail in accepting the graft, progressing eventually toward rejection. The triggers and mechanisms behind chronic activation in metabolic liver conditions and viral hepatitis will be discussed. The last part of the review will be dedicated to one of the greatest paradoxes for a tolerogenic organ, developing autoimmunity. Through the description of the three most common autoimmune liver diseases, the autoimmune reaction against hepatocytes and biliary epithelial cells will be dissected.