Activins are secreted proteins belonging to the TGF-β family of signaling molecules. Activin signals are crucial for differentiation and regulation of cell proliferation and apoptosis in multiple tissues. Signal transduction by activins relies mainly on the Smad pathway, although the importance of crosstalk with additional pathways is increasingly being recognized. Activin signals are kept in balance by antagonists at multiple levels of the signaling cascade. Among these, follistatin and FLRG, two members of the emerging family of follistatin-like proteins, can bind secreted activins with high affinity, thereby blocking their access to cell surface-anchored activin receptors. In the liver, activin A is a major negative regulator of hepatocyte proliferation and can induce apoptosis. The functions of other activins expressed by hepatocytes have yet to be more clearly defined. Deregulated expression of activins and follistatin has been implicated in hepatic diseases including inflammation, fibrosis, liver failure and primary cancer. In particular, increased follistatin levels have been found in the circulation and in the tumor tissue of patients suffering from hepatocellular carcinoma as well as in animal models of liver cancer. It has been argued that up-regulation of follistatin protects neoplastic hepatocytes from activin-mediated growth inhibition and apoptosis. The use of follistatin as biomarker for liver tumor development is impeded, however, due to the presence of elevated follistatin levels already during preceding stages of liver disease. The current article summarizes our evolving understanding of the multi-faceted activities of activins and follistatins in liver physiology and cancer.