Halliday was taken out of the intensive care unit but will remain at Pullman Regional Hospital, Bill Drake, assistant athletic director for training services, said Monday.
The redshirt freshman was admitted to the hospital shortly after Saturday's game, complaining of pain. He suffered numerous hard hits during Washington State's 30-27 loss to Utah.
"He had an unbelievably courageous outing," coach Paul Wulff said Sunday night. "It looked like the initial injury probably happened early in the second quarter. He hung in there, took hits, and threw the ball under duress and pain.
"He brought us all the way back with a chance to win the game, so I'm very proud of his toughness and grit," Wulff said.
Specialists at the hospital determined he suffered a lacerated liver.
Marshall Lobbestael will replace Halliday. Since his freshman year, Lobbestael has made a career of replacing injured starting quarterbacks at WSU.
The senior stepped in for injured starter Jeff Tuel at the beginning of this season, gave way when Tuel was cleared to return, became the starter again when Tuel was injured again, and then was benched when Halliday outplayed him two weeks ago.
In 10 games this season, Lobbestael has completed 59.9 percent of his passes for 2,240 yards and 16 touchdowns. Sophomore David Gilbertson is the backup.
Halliday made his first Pac-12 appearance against Arizona State on Nov. 12, entering the game in the third series and throwing for a Pac-12 freshman-record 494 yards and four touchdowns in the upset victory.
Utah was his first career start, and the game, played in a driving snowstorm, was rough from the beginning. Halliday threw three first-half interceptions, and was constantly pounded into the turf after throwing.
But he did not miss a down and threw for more than 200 yards after halftime. Halliday finished 21 of 48 for 290 yards.