Metabolizing and eliminating toxic chemicals in the liver are key processes in the body’s defense system. Drug-metabolizing enzymes (DMEs) play central roles in such processes. The activity and expression of several key DMEs are changed in various liver diseases and thus lead to significantly altered drug disposition. This phenomenon severely affects the pharmacotherapy of clinical medications in terms of the safety and efficacy of drug responses. This review highlights liver physiological functions, altered DMEs, and altered drug disposition in liver diseases. Moreover, the implications of changes in DMEs on the fate of clinically relevant drugs are also discussed. Pregnane X receptor and constitutive androstane receptor are two liver-enriched nuclear receptors originally defined as xenobiotic sensors that affect regulation of DMEs. Altered regulation of DMEs in liver diseases contributes to the development of powerful in vitro and in vivo tools to predict drug responses and options for improved drug delivery and development. Although a number of treatment drugs are available for liver diseases, they are limited by their low drug concentration in the target site, presence of side effects, and instability in the human body. The nanoparticle drug delivery system has recently attracted research attention because of its potential to offer solutions to current obstacles that involve the use of therapeutic drugs for liver diseases. Conclusively, this review aims to improve understanding on the regulation of DMEs in liver diseases and on corresponding implications in drug disposition, including novel therapeutic medications.