Luteolin is a dietary flavonoid widely distributed in fruits and vegetables. It has attracted substantial preclinical interest due to its pleiotropic hepatoprotective effects against hepatic steatosis, inflammation, fibrosis, and hepatocellular carcinoma. By reviewing data from in vitro and in vivo studies, this review comprehensively synthesizes the full spectrum of liver-directed pharmacology of luteolin, covering metabolic and toxic liver injury, fibrosis, cancer, and viral hepatitis, while critically mapping each mechanism to specific disease contexts and systematically identifying the key challenges limiting its clinical translation. The underlying mechanisms of luteolin action involve activation of Nrf2-mediated antioxidant defense, suppression of NF-κB- and NLRP3-driven inflammatory responses, inhibition of hepatic stellate cell activation via the TGF-β/Smad and STAT3 pathways, and regulation of metabolic homeostasis through liver X receptor (LXR)/SREBP-1c and AMPK signaling. Despite well-characterized mechanisms in preclinical models, several critical gaps hinder its clinical translation: (1) Rigorous randomized controlled trials in well-defined patient populations are scarce, with only one combination supplement study reported. (2) The relative contribution of luteolin metabolites to its overall bioactivity remains poorly understood, even though derivatives such as luteolin-7-diglucuronide exhibit distinct pharmacological properties. Cell-type-specific delivery systems, which show promise in preclinical fibrosis and cancer models, have not been evaluated clinically. (3) Systematic studies on the synergistic effects of luteolin with standard-of-care drugs remain largely exploratory. Overall, luteolin is a promising multi-target nutraceutical for liver diseases, and its clinical translation requires optimized delivery strategies, investigation of metabolite activity, and well-designed human clinical trials.