The Liver Imaging Reporting and Data System (LI-RADS) is a comprehensive and robust system which provides an algorithmic approach to stratify the probability of hepatocellular carcinoma (HCC) for each observation found in patients at risk for HCC. LI-RADS uses a standardized terminology and approach to improve communication between the radiologist and clinicians. LI-RADS version 2018 is noteworthy for its adoption by the American Association for the Study of Liver Disease into its HCC practice guidance. This manuscript provides an overview of the history of LI-RADS, reviews the Computed tomography/magnetic resonance imaging diagnostic algorithm, highlights the key diagnostic criteria for each category, and discusses the advantage of incorporating LI-RADS in clinical practice.