Liv explained that the American Idol judge is comfortable wearing women's clothing and often raids her belongings to find garments that he likes.
Liv told New York magazine: "My dad wears girls' clothes - it's so funny. And sometimes I see him and I'm like, 'Nice shirt!', because it's from my closet."
Liv also praised her father's contribution to American Idol, saying that it made her "really proud" of him.
"I speak his language," explained Liv. "I understand what he's talking about. I feel really proud of him. I think he's a really amazing, magical man and all those funny things that he says that people find so strange, my whole life I've been hearing them and they make me laugh."
Steven, who recently admitted to spending $20m on drugs over his lifetime, has suggested that Aerosmith will settle their differences and get back together for an appearance on the American Idol finale.