BAMBI (bone morphogenetic protein and activin membrane-bound inhibitor) is a transmembrane pseudoreceptor structurally related to transforming growth factor (TGF)-β type 1 receptors (TGF-β1Rs). BAMBI lacks a kinase domain and functions as a TGF-β1R antagonist. Essential processes such as cell differentiation and proliferation are regulated by TGF-β1R signaling. TGF-β is the best-studied ligand of TGF-βRs and has an eminent role in inflammation and fibrogenesis. Liver fibrosis is the end stage of almost all chronic liver diseases, such as non-alcoholic fatty liver disease, and at the moment, there is no effective anti-fibrotic therapy available. Hepatic BAMBI is downregulated in rodent models of liver injury and in the fibrotic liver of patients, suggesting that low BAMBI has a role in liver fibrosis. Experimental evidence convincingly demonstrated that BAMBI overexpression is able to protect against liver fibrosis. Chronic liver diseases have a high risk of hepatocellular carcinoma (HCC), and BAMBI was shown to exert tumor-promoting as well as tumor-protective functions. This review article aims to summarize relevant studies on hepatic BAMBI expression and its role in chronic liver diseases and HCC.