Background: Hypothyroidism is a common endocrine disorder that significantly impacts liver function, often leading to elevated liver enzymes, oxidative stress, and structural damage. Emerging evidence suggests that vitamin D is crucial in modulating immune responses and metabolic pathways, offering potential therapeutic benefits in managing hypothyroidism-associated liver dysfunction. This study evaluated the efficacy of vitamin D supplementation in alleviating liver dysfunction in hypothyroid patients through biochemical, oxidative, and histological assessments. Methods: A prospective observational study was conducted at Pak International Medical College, Peshawar, from January 2023 to January 2024. A total of 101 participants were enrolled, including hypothyroid patients with liver dysfunction and healthy controls. Participants were divided into four groups: control, untreated hypothyroid, vitamin D treated, and combination therapy (vitamin D and levothyroxine). Biochemical parameters, including thyroid and liver function tests, oxidative stress markers, and inflammatory indicators, were measured pre- and post-treatment. Histological liver assessments were performed to evaluate structural changes. Data analysis was conducted using paired t tests, ANOVA, and Pearson’s correlation. Results: Vitamin D supplementation significantly improved liver function markers (ALT, AST, ALP, and total bilirubin) and reduced oxidative stress and inflammatory markers (MDA, SOD, GPx, CRP, IL-6, and TNF α) in the treated groups (p < 0.001). Histological analysis revealed notable improvements in hepatocyte morphology, reduced Kupffer cell activation, and lower fibrosis scores. The combination therapy group demonstrated the most substantial improvements, highlighting the synergistic effect of vitamin D and levothyroxine. A positive correlation between serum vitamin D levels and liver function restoration was observed. Conclusion: This study provides compelling evidence for the therapeutic potential of vitamin D in managing hypothyroidism-associated liver dysfunction. By improving liver function, reducing oxidative stress and inflammation, and restoring hepatic structure, vitamin D offers a promising adjunctive therapy. Incorporating vitamin D supplementation into hypothyroidism management protocols could enhance treatment outcomes and minimize liver-related complications.