Atopic dermatitis (AD) is a common inflammatory dermatitis of the skin and poses therapeutic challenges due to the adverse reactions and high costs associated with available treatments. In Eastern Asian countries, a plethora of herbal remedies is extensively employed for the alleviation of AD. Many of these botanicals are renowned for their formidable anti-inflammatory properties, contributing to AD management. Chinese herbal medicine (CHM) and its active ingredients exhibit both prophylactic and therapeutic promise against AD by modulating inflammatory response, orchestrating immune system functions, and enhancing antioxidant activities. A comprehensive exploration of the underlying mechanisms involved in CHM treatment can enhance the comprehension of AD pathogenesis and facilitate the development of innovative drugs for AD. This study aims to elucidate the signaling pathways and potential targets implicated in CHM-based treatment of AD, providing a systematic theoretical framework for its application in therapy while serving as a valuable reference for developing more effective and safer AD therapeutic agents.