Hepatobiliary disorders are among the most common extraintestinal manifestations in inflammatory bowel diseases (IBD), both in Crohn’s disease and ulcerative colitis (UC), and therefore represent a diagnostic challenge. Immune-mediated conditions include primary sclerosing cholangitis (PSC) as the main form, variant forms of PSC (namely small-duct PSC, PSC-autoimmune hepatitis overlap syndrome and IgG4-related sclerosing cholangitis) and granulomatous hepatitis. PSC is by far the most common, presenting in up to 8% of IBD patients, more frequently in UC. Several genetic foci have been identified, but environmental factors are preponderant on disease pathogenesis. The course of the two diseases is typically independent. PSC diagnosis is based mostly on typical radiological findings and exclusion of secondary cholangiopathies. Risk of cholangiocarcinoma is significantly increased in PSC, as well as the risk of colorectal cancer in patients with PSC and IBD-related colitis. No disease-modifying drugs are approved to date. Thus, PSC management is directed against symptoms and complications and includes medical therapies for pruritus, endoscopic treatment of biliary stenosis and liver transplant for end-stage liver disease. Other non-immune-mediated hepatobiliary disorders are gallstone disease, whose incidence is higher in IBD and reported in up to one third of IBD patients, non-alcoholic fatty liver disease, pyogenic liver abscess and portal vein thrombosis. Drug-induced liver injury (DILI) is an important issue in IBD, since most IBD therapies may cause liver toxicity; however, the incidence of serious adverse events is low. Thiopurines and methotrexate are the most associated with DILI, while the risk related to anti-tumor necrosis factor-α and anti-integrins is low. Data on hepatotoxicity of newer drugs approved for IBD, like anti-interleukin 12/23 and tofacitinib, are still scarce, but the evidence from other rheumatic diseases is reassuring. Hepatitis B reactivation during immunosuppressive therapy is a major concern in IBD, and adequate screening and vaccination is warranted. On the other hand, hepatitis C reactivation does not seem to be a real risk, and hepatitis C antiviral treatment does not influence IBD natural history. The approach to an IBD patient with abnormal liver function tests is complex due to the wide range of differential diagnosis, but it is of paramount importance to make a quick and accurate diagnosis, as it may influence the therapeutic management.