The objective of this study is to summarize the pharmacological effects and the mechanisms of action of Xiao Chai Hu Tang (XCHT, Minor Bupleurum Decoction) on liver diseases, so as to give relevant researchers a valuable insight and benefit patients with hepatopathy. PubMed was used to search for and collect scientific publications related to XCHT and liver diseases from 1986 to 2016. The available scientific results or evidence were read, classified, and analyzed. XCHT showed clinical efficacy in patients with hepatic diseases including hepatitis, hepatic fibrosis, and hepatoma. The mechanisms involved the production of cytokines, the regulation of immune function, the suppression of lipid peroxidation, etc., XCHT might work on the metabolism of some medications such as tolbutamide by the regulation of gastric emptying and intragastric pH. XCHT exhibited a very low toxicity profile, such as interstitial pneumonia due to duration of medication, patients’ age, and drug combination. XCHT has been a eutherapeutic supplemental remedy for liver diseases. However, many mechanisms of action and effects of XCHT on new types of liver diseases still remain unclear, so more and more animal experiments and human clinical trials are needed to obtain enough proofs for the clinical use of XCHT in new types of hepatosis such as nonalcoholic fatty liver disease and autoimmune liver disease.