Abstract Nonalcoholic fatty liver disease (NAFLD) has become the most prevalent cause of liver disease, increasingly contributing to the burden of liver transplantation. In search for effective treatments, novel strategies addressing metabolic dysregulation, inflammation, and fibrosis are continuously emerging. Disturbed bile acid (BA) homeostasis and microcholestasis via hepatocellular retention of potentially toxic BAs may be an underappreciated factor in the pathogenesis of NAFLD and nonalcoholic steatohepatitis (NASH) as its progressive variant. In addition to their detergent properties, BAs act as signaling molecules regulating cellular homeostasis through interaction with BA receptors such as the Farnesoid X receptor (FXR). Apart from being a key regulator of BA metabolism and enterohepatic circulation, FXR regulates metabolic homeostasis and has immune-modulatory effects, making it an attractive therapeutic target in NAFLD/NASH. In this review, the molecular basis and therapeutic potential of targeting FXR with a specific focus on restoring BA and metabolic homeostasis in NASH is summarized.