The success of liver transplantation has led to an ever-increasing demand for liver grafts. Since the first successful living donor liver transplantation, this surgical innovation has been well established in children and has significantly relieved the crisis of donor organ shortage for children. However, the extension of living donor liver transplantation to adult recipients is limited by the graft volume. The major concern of adult-to-adult living donor liver transplantation is the adequate graft that can be harvested from a living donor. Small-for-size graft injury is frequently observed. To develop novel effective treatments attenuating small-for-size liver graft injury during living donor liver transplantation, it is important to explore the precise mechanism of acute phase small-for-size graft damage. Recently, a number of clinical studies and animal experiments have been conducted to investigate the possible key issues on acute phase small-for-size liver graft injury, such as mechanical injury from shear stress, subsequent inflammatory responses, and imbalance of vasoregulatory factors. This review focuses on the mechanism of small-for-size liver graft injury based on the number of clinical and experimental studies. The latest research findings of the significance of acute phase liver graft injury on late phase tumor recurrence and metastasis are also addressed.