The present invention relates to liquid pharmaceutical compositions of tofacitinib or its pharmaceutically acceptable salts thereof, suitable for oral administration, that are stable under varying storage conditions for extended periods of time. The present invention also relates to methods of treating auto-immune disorders using the stable liquid pharmaceutical compositions of tofacitinib. A stable liquid pharmaceutical composition of tofacitinib according to the invention comprises of (a) tofacitinib at a concentration of about 1 mg/mL or more; (b) a pharmaceutically acceptable liquid vehicle; (c) at least one anti-oxidant; and (d) optionally one or more other pharmaceutically acceptable excipients.