I am asking with respect to decoding a job ad for an assistant professor position at a US University. The ad essentially asks how my talents and goals relate to a 'liberal arts environment'. Previously I associated 'liberal arts' with the major that goes by that name, or thought that it simply meant well-rounded, which is something a student could get at any school. So I guess another version of my question is, what isn't a liberal arts environment at a US university?
There is an important distinction to make between a "liberal arts college" and a liberal arts environment in general.
The former indicates a particular kind of school, normally without graduate schools and professional degree programs, which specializes largely in undergraduate education. While faculty and students do participate in research activities, they are not nearly as extensive or as important as at research universities.
The liberal arts environment, on the other hand, is the tradition in which essentially all modern Western university operates.
While I don't mean to make these binaries -- because they really aren't and there is a lot of fluidity in humanistic endeavors involving technology and likewise technology that is deeply invested in humanistic thinking, etc -- what "isn't a "liberal arts environment" is a STEM environment (science, technology, engineering, math).
Working in a liberal arts environment in general means there is room for and the expectations of independent and outside-of-the-box thinking, reasoning, and problem-solving, rather than what some might call more rigid practices and procedures. Often, a premium is placed on one's ability to communicate opinions and interpretations effectively, and to listen to and consider alternatives -- sometimes to the point where the conversations and the path toward problem-solving ends up more important and useful to the organization (and yourself) more than the actual answer itself. Projects and research tends toward better and fully understanding human nature and society, rather than tangible products, per se.
Or, it could simply mean you'll be working with a bunch of English and History professors instead of Biology professors.
Note: This answer was written when this question was at The Workplace SE, and it did not have specifics about the position itself as it does now. This answer is more appropriate for someone taking a general staff position within a college or university and not for a faculty position that is already in a specific field.
A liberal arts environment generally focuses on teaching, research, and service. Teaching seems to be the biggest component of a liberal arts environment. Service is also important. A good research program is important also, it is just that more time is spent teaching and honing teaching skills. Usually, teaching evaluations have more weight than publishing in high impact journals.