Despite recent advances, the causes of and effective therapies for pediatric chronic cholestatic diseases remain elusive, and many patients progress to liver failure and need liver transplantation. Malnutrition is a common complication in these patients and is a well-recognized, tremendous challenge for the clinician. We undertook a narrative review of both recent and relevant older literature, published during the last 20 years, for studies linking nutrition to pediatric chronic cholestasis. The collected data confirm that malnutrition and failure to thrive are associated with increased risks of morbidity and mortality, and they also affect the outcomes of liver transplantation, including long-term survival. Malnutrition in children with chronic liver disease is multifactorial and with multiple potential nutritional deficiencies. To improve life expectancy and the quality of life, patients require careful assessments and appropriate management of their nutritional statuses by multidisciplinary teams, which can identify and/or prevent specific deficiencies and initiate appropriate interventions. Solutions available for the clinical management of these children in general, as well as those directed to specific etiologies, are summarized. We particularly focus on fat-soluble vitamin deficiency and malnutrition due to fat malabsorption. Supplemental feeding, including medium-chain triglycerides, essential fatty acids, branched-chain amino acids, and the extra calories needed to overcome the consequences of anorexia and high energy requirements, is reviewed. Future studies should address the need for further improving commercially available and nutritionally complete infant milk formulae for the dietary management of this fragile category of patients. The aid of a specialist dietitian, educational training regarding nutritional guidelines for stakeholders, and improving family nutritional health literacy appear essential.