Inflammation is a hallmark of progressive liver diseases such as chronic viral or immune-mediated hepatitis, alcohol-associated liver disease, and NAFLD. Preclinical and clinical studies have provided robust evidence that cytokines and related cellular stress sensors in innate and adaptive immunity orchestrate hepatic disease processes. Unresolved inflammation and liver injury result in hepatic scarring, fibrosis, and cirrhosis, which may culminate in HCC. Liver diseases are accompanied by gut dysbiosis and a bloom of pathobionts, fueling hepatic inflammation. Anti-inflammatory strategies are extensively used to treat human immune-mediated conditions beyond the liver, while evidence for immunomodulatory therapies and cell therapy–based strategies in liver diseases is only emerging. The development and establishment of novel immunomodulatory therapies for chronic liver diseases has been dampened by several clinical challenges, such as invasive monitoring of therapeutic efficacy with liver biopsy in clinical trials and risk of DILI in several studies. Such aspects prevented advancements of novel medical therapies for chronic inflammatory liver diseases. New concepts modulating the liver immune environment are studied and eagerly awaited to improve the management of chronic liver diseases in the future.