Transarterial chemoembolization (TACE) is a cornerstone locoregional therapy for hepatocellular carcinoma (HCC), yet most candidates also have cirrhosis. That makes TACE a balancing act: controlling tumor progression while protecting a liver with limited functional reserve, often over multiple sessions. This narrative review synthesizes current evidence on TACE-induced liver injury (TACE-LI), with emphasis on its definitions, mechanisms, risk prediction, and prevention, and further contextualizes emerging data on the gut-liver axis and inflammasome signaling. Clinically, TACE-LI spans a spectrum from transient biochemical worsening and post-embolization syndrome (PES; fever, pain, malaise) to clinically meaningful decompensation and post-TACE liver failure (PTLF). A key challenge is that the literature uses heterogeneous definitions and thresholds for both TACE-LI and PTLF, complicating comparisons between studies and weakening clarity around retreatment decisions. Mechanistically, injury is multifactorial: arterial ischemia from embolization, ischemia-reperfusion and oxidative stress, local chemotherapeutic toxicity and material retention, biliary or microvascular injury, and a systemic inflammatory response that can drive both symptoms and laboratory derangement. Our review also highlights how cirrhosis-associated gut barrier dysfunction may prime inflammatory cascades through dysbiosis, bacterial translocation, and endotoxin signaling (e.g., LPS–TLR4), potentially shaping vulnerability after embolization. In this context, inflammasome pathways, especially NLRP3, are discussed as amplifiers that translate danger signals (DAMPs), reactive oxygen species, and microbial cues into IL-1β/IL-18 release and pyroptotic injury, linking sterile ischemic damage to immune activation. For risk stratification, baseline hepatic reserve (Child–Pugh, ALBI), tumor burden, and technical intensity remain central, and dynamic indicators such as post-TACE ALBI deterioration help capture clinically relevant trajectories. Our review also summarizes predictive tools such as nomograms and models for complications (including PES), and notes ongoing exploration of machine-learning–assisted decision support. Prevention ultimately rests on careful patient selection, liver-sparing technique (including superselective approaches when feasible), and structured peri-procedural care to mitigate PES and reduce infectious or biliary complications.