Here are my choices for the top ten best libertarian books, in no particular order. My Amazon.com wish list is here. Some are also available form the Advocates for Self-Government, The Cato Institute, Laissez Faire Club, or from the author's website. Many can be downloaded as PDFs for free.
1. “Libertarianism in One Lesson” by David Bergland
3. “For a New Liberty: The Libertarian Manifesto” by Murray N. Rothbard
5. “Healing Our World In An Age of Aggression” by Dr. Mary J. Ruwart
6. “Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics" by Henry Hazlitt
7. “The Road to Serfdom” by F. A. Hayek
8. “The Law” by Frederic Bastiat
9. “The Libertarian Reader: Classic and Contemporary Writings from Lao-tzu to Milton Friedman” edited by David Boaz
10. “Free To Choose” by Milton and Rose Friedman
“Free to Choose” was also made into a PBS TV series, with an introduction by Arnold Schwarzenegger, before he became California governor.
There are also two books suitable as reference works for anyone seeking a libertarian answer to whatever question is on their mind. I highly recommend both for the library of any libertarian activist or candidate.
The first is the new and expanded addition of Dr. Mary Ruwart's “Short Answers to Tough Questions: How to Answer the Questions Libertarians Are Often Asked.”
The second is another classic by the late, great Harry Browne, “Liberty A-Z: 872 Libertarian Soundbites You Can Use Right Now!” He also wrote two other books, “Why Government Doesn’t Work” and “The Great Libertarian Offer” for his two presidential campaigns.
For people interested in fiction, the most popular work is the classic story of a future dystopia, “Atlas Shrugged” by Ayn Rand. It is a monster of a book, so big that it is being made into not one but three movies. So you might want to read “The Fountainhead” instead. It makes the same point, but is much shorter.
Personally, I'd prefer a book I read as a teenager, “The Moon Is A Harsh Mistress” by Robert Heinlein. First, because I love science fiction. Second, because I don't buy into Rand's philosophy of objectivism.
Someone also recommend “Walden” by Henry David Thoreau as a good libertarian read.
Finally, here is a collection of libertarian book lists on the web.