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Tauroursodeoxycholic acid, more commonly referred to as TUDCA, is a bile salt that is found natrually occurring in the body. When regular bile salts reach the intestines, they can be metabolized by bacteria into UDCA and then later bound to a Taurine molecule to become TUDCA.
TUDCA is a water-soluble bile salt, which is in contrast to regular bile salts possessing both water soluble and fat soluble ends and conferring a detergent effect. This is good for the bile salt's biological purpose (emulsifying fats in the intestines to help with absorption) but when bile acids back up in the liver, a clinical state called cholestasis which occurs when the liver is unhealthy, these bile salts can be damaging to cells by destroying the membranes and signalling for cell death. TUDCA and other water soluble bile salts like UDCA compete with this toxicity and thus indirectly protect cells from death.
Additionally, it seems that TUDCA is able to reduce stress to any cell's Endoplasmic Reticulum; an organelle in cells that serves as a highway from the nucleus out into the cytoplasm, and aids in folding proteins. Through reducing ER stress, TUDCA has been implicated in a wide range of beneficial metabolic effects such as reducing insulin resistance and diabetes, and being a neurological protection agent. However, usages of TUDCA beyond the liver are preliminary whereas usage of TUDCA for helping an already harmed liver is quite reliable as TUDCA is used in clinical settings (hospitals) for treating cholestasis.