Immunological interplay between donor cells and recipient immune system determines allograft function. Alloreactivity of recipient T-lymphocytes via activated dendritic cells against donor hepatocytes leads to liver rejection. Immunosuppressive drugs play a vital role in mitigating T-cell activation and proliferation, thus protecting the grafted liver. An ideal immunosuppressive drug should maintain normal liver allograft function, with minimal side effects. A detailed knowledge and understanding of immunosuppressive drugs and their interactions are essential for the effective management of liver transplant recipients. Drugs metabolized through cytochrome 3A4 may affect the therapeutic levels of calcineurin and mTOR inhibitors, increasing the risk of graft rejection or immunosuppressive drug toxicity. Several serum biomarkers focusing on T-cell function, cytokine release, and pharmacogenetics of immunosuppressive drug metabolism are in the pipeline, which may improve the clinical management of transplant recipients. Newer advancements in genomics, transcriptomics, and proteomics are likely to provide personalized immunosuppression, the way forward in the future.