Liver is the largest substantial organ in the abdominal cavity and it provides an essential role in maintaining the basic physiological functions. Liver diseases have become one of the common and frequently-occurring diseases that affect 10% of the population worldwide, usually with liver fibrosis as the late stage pathological characteristic. Due to the complexity of pathogenesis, there is no effective synthetic drug to treat liver fibrosis up to date. Traditional Chinese medicine (TCM) has the advantages of multiple targets and small side effects in the treatment of liver fibrosis. This article reviews the pathological mechanism of liver fibrosis and its relationship with inflammation. The application of the active herbal ingredients in TCM, medicinal plants and traditional Chinese formulae to treat liver fibrosis, and their mechanisms of action to inhibit inflammation associated with liver fibrosis are also discussed.