Autophagy is a highly conserved catabolic process that degrades cytosolic proteins and organelles via formation of autophagosomes that fuse with lysosomes to form autolysosomes, whereby autophagic cargos are degraded. Numerous studies have demonstrated that autophagy plays a critical role in the regulation of liver physiology and homeostasis, and impaired autophagy leads to the pathogenesis of various liver diseases such as viral hepatitis, alcohol associated liver diseases (AALD), non-alcoholic fatty liver diseases (NAFLD), and liver cancer. Recent evidence indicates that autophagy may play a dual role in liver cancer: inhibiting early tumor initiation while promoting progression and malignancy of already formed liver tumors. In this review, we summarized the progress of current understanding of how hepatic viral infection, alcohol consumption and diet-induced fatty liver diseases impair hepatic autophagy. We also discussed how impaired autophagy promotes liver tumorigenesis, and paradoxically how autophagy is required to promote the malignancy and progression of liver cancer. Understanding the molecular mechanisms underlying how autophagy differentially affects liver cancer development and progression may help to design better therapeutic strategies for prevention and treatment of liver cancer.