Early allograft dysfunction (EAD) is a critical clinical endpoint determining the risk of graft loss associated with various specific donor or recipient risk factors. Importantly, it also acts as an intermediate endpoint in translational studies aiming to identify mechanistic pathways and explore prognostic biomarkers of graft dysfunction or failure. A rising global organ shortage has necessitated using marginal liver organs and liver transplantation in high-acuity recipients, which has proportionately enhanced the risk of EAD. The early recognition of severe EAD is highly relevant and desirable in educating the patients, formulating an effective mitigating strategy, and potentially guiding earlier re-transplantation. This review provides an overview of EAD after LT, discusses current pathophysiology concepts, formulates a management algorithm, and suggests future directions for research.