The liver's role in metabolism, detoxification, and immune regulation underscores the urgency of addressing liver diseases, which claim millions of lives annually. Due to donor shortages in liver transplantation, liver tissue engineering (LTE) offers a promising alternative. Hydrogels, with their biocompatibility and ability to mimic the liver's extracellular matrix (ECM), support cell survival and function in LTE. This review analyzes recent advances in hydrogel-based strategies for LTE, including decellularized liver tissue hydrogels, natural polymer-based hydrogels, and synthetic polymer-based hydrogels. These materials are ideal for in vitro cell culture and obtaining functional hepatocytes. Hydrogels' tunable properties facilitate creating artificial liver models, such as organoids, 3D bioprinting, and liveron-a-chip technologies. These developments demonstrate hydrogels' versatility in advancing LTE's applications, including hepatotoxicity testing, liver tissue regeneration, and treating acute liver failure. This review highlights the transformative potential of hydrogels in LTE and their implications for future research and clinical practice.