In the past decade, an exciting realization has been that diverse liver diseases - ranging from nonalcoholic steatohepatitis, alcoholic steatohepatitis and cirrhosis to hepatocellular carcinoma - fall along a spectrum. Work on the biology of the gut-liver axis has assisted in understanding the basic biology of both alcoholic fatty liver disease and nonalcoholic fatty liver disease (NAFLD). Of immense importance is the advancement in understanding the role of the microbiome, driven by high-throughput DNA sequencing and improved computational techniques that enable the complexity of the microbiome to be interrogated, together with improved experimental designs. Here, we review gut-liver communications in liver disease, exploring the molecular, genetic and microbiome relationships and discussing prospects for exploiting the microbiome to determine liver disease stage and to predict the effects of pharmaceutical, dietary and other interventions at a population and individual level. Although much work remains to be done in understanding the relationship between the microbiome and liver disease, rapid progress towards clinical applications is being made, especially in study designs that complement human intervention studies with mechanistic work in mice that have been humanized in multiple respects, including the genetic, immunological and microbiome characteristics of individual patients. These 'avatar mice' could be especially useful for guiding new microbiome-based or microbiome-informed therapies.