Kupffer cells (KC) constitute 80-90% of the tissue macrophages present in the body. They reside within the lumen of the liver sinusoids, and are therefore constantly exposed to gut-derived bacteria, microbial debris and bacterial endotoxins, known to activate macrophages. Upon activation KC release various products, including cytokines, prostanoides, nitric oxide and reactive oxygen species. These factors regulate the phenotype of KC themselves, and the phenotypes of neighboring cells, such as hepatocytes, stellate cells, endothelial cells and other immune cells that traffic through the liver. Therefore, KC are intimately involved in the liver's response to infection, toxins, ischemia, resection and other stresses. This review summarizes established basic concepts of KC function as well as their role in the pathogenesis of various liver diseases.