Vasoactive drugs form the mainstay of therapy for two of the most important complications of liver disease: hepatorenal syndrome (HRS) and acute variceal bleed (AVB). With cumulative evidence supporting the use in cirrhosis, terlipressin has been recommended for the management of HRS and AVB. However, owing to the safety concerns, terlipressin was not approved by food and drug administration (FDA) until now. In this review, we discuss the pharmacology and the major practice‐changing studies on the safety and efficacy of terlipressin in patients with cirrhosis particularly focusing on existing indications like AVB and HRS and reviewing new data on the expanding indications in liver disease. The references for this review were identified from PUBMED with MeSH terms such as “terlipressin,” “hepatorenal syndrome,” “varices, esophagal and gastric,” “ascites” and “cirrhosis.” Terlipressin, a synthetic analogue of vasopressin, was introduced in 1975 to overcome the adverse effects of vasopressin. Terlipressin is an effective drug for HRS reversal in patients with liver cirrhosis and acute‐on‐chronic liver failure. There is documented mortality benefit with terlipressin therapy in HRS and AVB. Adverse effects are common with terlipressin and need to be monitored strictly. There is some evidence to support the use of this drug in refractory ascites, hepatic hydrothorax, paracentesis‐induced circulatory dysfunction and perioperatively during liver transplantation. However, terlipressin is not yet recommended for such indications. In conclusion, terlipressin has stood the test of time with expanding indications and clear prerequisites for clinical use. Our review warrants a fresh perspective on the efficacy and safety of terlipressin.