The role of parenteral lipid emulsions in the treatment of intestinal failure-associated liver disease (IFALD) is both topical and controversial. There is strong evidence supporting plant-based (soy, olive) lipid emulsions as a key cause for IFALD, especially in neonates. As a result, alternate lipid formulations, most notably fish oil emulsions (FOE) have come into widespread use despite somewhat limited clinical data on their overall benefit and potential long-term consequences. This review examines putative mechanisms of action of FOE in reversing cholestasis associated with IFALD, and critically reviews published clinical studies of the use of FOE in pediatric patients with IFALD. From these works, it appears the mechanism of action of FOE is most likely related to the reduction of serum phytosterols associated with plant-based lipid emulsions rather than a specific positive benefit of the fish oils themselves. Although the use of FOE seems to correlate with a reduction in cholestasis, their actual individual benefit is not established, and data on long-term outcomes and safety are not yet available.