This paper explores the effect of a liquid lithium curtain on fusion reactor plasma, such curtain is utilized as the first wall for the engineering outline design of the Fusion Experimental Breeder (FEB-E). The relationships between the surface temperature of a liquid lithium curtain and the effective plasma charge, fuel dilution and fusion power production have been derived. Results indicate that under normal operation, the evaporation of liquid lithium does not seriously affect the effective plasma charge, but effects on fuel dilution and fusion power are more sensitive. As an example, it has investigated the relationships between the liquid lithium curtain flow velocity and the rise of surface temperature based on operation scenario Ⅱ of the FEB-E design with reversed shear configuration and high power density. Results show that even if the liquid lithium curtain flow velocity is as low as 0.5 m/s, the effects of evaporation from the liquid lithium curtain on plasma are negligible. In the present design, the sputtering of liquid lithium curtain and the particle removal effects of the divertor are not yet considered in detail. Further studies are in progress, and in this work implication of lithium erosion and divertor physics on fusion reactor operation are discussed.