Bile acids (BAs) are evolutionally conserved molecules synthesized in the liver from cholesterol and have been shown to be essential for lipid homeostasis. BAs regulate a variety of metabolic functions via modulating nuclear and membrane receptors. Farnesoid X receptor (FXR) is the most important nuclear receptor for maintaining BA homeostasis. FXR plays a tissue-specific role in suppressing BA synthesis and promoting BA enterohepatic circulation. Disruption of FXR in mice have been implicated in liver diseases commonly occurring in humans, including cholestasis, non-alcoholic fatty liver diseases, and hepatocellular carcinoma. Strategically targeting FXR activity has been rapidly used to develop novel therapies for the prevention and/or treatment of cholestasis and non-alcoholic steatohepatitis. However, cautions need to be taken for adverse side effects.