Background: Coronavirus disease-2019 (COVID-19) is both an infective and inflammatory disorder. The liver is the principal site for the orchestration of inflammatory cascade after entry of SARS-CoV2 in humans. The study of liver-related parameters has immense potential to understand the pathophysiologic alteration and identify the therapeutic targets related to COVID-19 infection. Method: A single-center, prospective, cross-sectional, and non-interventional study was conducted on the patients who were COVID-19 positive through RT-PCR test. Comparing and correlating the parameters of liver function test (LFT) between the disease severity group (severe vs non-severe) and also the in-hospital-outcome group (discharge and death) and the assessment of the strength of association (by calculating odds ratio [OR]) of individual LFT parameters for disease severity and in-hospital outcomes. Results: Among the total number of patients 507 suitable patients were identified. Liver function tests at presentation were considered for the study. Individual parameters in LFT were compared and the strength of association was measured with disease severity and in-hospital outcomes. Disease severity was measured by CURB 65, q SOFA, and AIIMS/ICMR 2021 Clinical severity scores. In-hospital outcomes were defined as discharge or death. We observed significant differences with respect to serum albumin level, SGOT, SGPT, and albumin globulin ratio between severe and non-severe groups of COVID-19-positive patients. Hypoalbuminemia followed by transaminitis were the commonest abnormalities. Conclusion: Among the individual LFT parameters, hypoalbuminemia followed by transaminitis were the most frequent abnormalities. The altered liver functions were strongly associated with disease severity and outcomes. Hypoalbuminemia and high transaminase (SGOT and SGPT) levels had strong association with disease severity and outcomes.