Intestinal failure is characterized by loss of enteral function to absorb necessary nutrients and water to sustain life. Parenteral nutrition (PN) is a lifesaving therapeutic modality for patients with intestinal failure. Lifelong PN is also needed for patients who have short bowel syndrome due to extensive resection or a dysmotility disorder with malabsorption. However, prolonged PN is associated with short-term and long-term complications. Parenteral nutrition-associated liver disease (PNALD) is one of the long-term complications associated with the use of an intravenous lipid emulsion to prevent essential fatty acid deficiency in these patients. PNALD affects 30–60% of the adult population on long-term PN. Further, PNALD is one of the indications for isolated liver or combined liver and intestinal transplantation. There is no consensus on how to manage PNALD, but fish oil-based lipid emulsion (FOBLE) has been suggested to play an important role both in its prevention and reversal. There is significant improvement in liver function in those who received FOBLE as lipid supplement compared with those who received soy-based lipid emulsion. Studies have also demonstrated that FOBLE reverses hepatic steatosis and reduces markers of inflammation in patients on long-term PN. Future prospective studies with larger sample sizes are needed to further strengthen the positive role of FOBLE in PNALD.