Premature infants and children with intestinal failure (IF) or short bowel syndrome are susceptible to intestinal failure-associated liver disease (IFALD, previously referred to as parenteral nutrition-associated liver disease, or PNALD). IFALD in children is characterized by progressive cholestasis and biliary fibrosis, and steatohepatitis in adults, and is seen in individuals dependent upon prolonged administration of PN. Many factors have been proposed as contributing to the pathogenesis of IFALD. In recent years, the focus has been on the potential synergistic roles of the intestinal microbiome, increased intestinal permeability, activation of hepatic innate immune pathways, and the use of intravenous soybean-oil-based intravenous lipid emulsions (SO-ILE). In vitro and in vivo studies have identified stigmasterol, a component of the plant sterols present in SO-ILE, as playing an important role. Although various strategies have been adopted to prevent or reverse IFALD, most suffer from a lack of strong evidence supported by well-designed, prospective clinical trials with clearly defined endpoints. Reduction in the amount of SO-ILEs or replacement with non-SO-ILEs has been shown to reverse IFALD although safety and long-term effectiveness have not been studied. Medical and surgical modalities to increase intestinal adaptation, advance enteral feedings, and prevent central line bloodstream infections are also important preventative strategies. There is a continued need to conduct high-quality, prospective trials with clearly define outcome measures to ascertain the potential benefits of these strategies.