Background Dengue is one of the most common vector-borne diseases in India, and it is transmitted by Aedes family mosquitoes. Hepatic injury is known to occur from dengue infection. Direct hepatotoxicity and deranged host immune responses to the virus are responsible for this hepatic dysfunction. Hence, the study was undertaken to understand the deranged hepatic enzymes using liver function tests (LFTs)and the severity and outcome of dengue fever in children. Methods This study is an observational-descriptive study conducted between June 2022 and May 2024. The study population includes children between the ages of one month and 16 years who have been diagnosed with dengue fever andadmitted to pediatric wards and pediatric intensive care units (PICUs), with a sample size of 151. Informed consent from guardians and institutional ethical clearance were obtained. Results A total of 4.8% (N = 7) mortality was seen in this study with dengue patients. Hepatomegaly was seen in34% (N = 49)of cases. There is a clear statistical significance that is seen among the non-survived and survived dengue patients with a 10-fold increase in serum glutamic-oxaloacetic transaminase (SGOT) and serum glutamic pyruvic transaminase (SGPT) levels, respectively, along with total bilirubin, activated partial thromboplastin time(APTT), and prothrombin time (PT). Conclusions The current study shows that deranged LFTs are associated with more severe disease with more PICUadmissions and mortality of the disease. The evidence clearly indicates the inclusion of LFTs as a routine investigation to understand the severity of the disease and the prognosis of the outcome.