Transglutaminases are a family of eight currently known calcium-dependent enzymes that catalyze the cross-linking or deamidation of proteins. They are involved in important biological processes such as wound healing, tissue repair, fibrogenesis, apoptosis, inflammation and cell-cycle control. Therefore, they play important roles in the pathomechanisms of autoimmune, inflammatory and degenerative diseases, many of which affect the gastrointestinal system. Transglutaminase 2 is prominent, since it is central to the pathogenesis of celiac disease, and modulates inflammation and fibrosis in inflammatory bowel and chronic liver diseases. This review highlights our present understanding of transglutaminase function in gastrointestinal and liver diseases and therapeutic strategies that target transglutaminase activities.