Liquid pharmaceutical compositions of tofacitinib or its pharmaceutically acceptable salts thereof are described, which are suitable for oral administration, and which are stable under varying storage conditions for extended periods of time. Methods of treating auto-immune disorders are also described, 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.