Hepatitis B induced by hepatitis B virus (HBV) remains a major public health problem worldwide. Although several antiviral drugs have been approved for hepatitis B, they cause significant dose-dependent side-effects (interferon-alpha) and drug resistance (lamivudine, etc.). Safe and potent new anti-HBV drugs are urgently needed. Traditional Chinese medicine (TCM) is an established segment of the health care system in China and widely used for hepatitis B in China and many parts of the world. Many TCMs and related active compounds have been reported that have promising and potent anti-HBV activities, including Phyllanthus, Salvia miltiorrhiza, Rheum palmatum L., Radix Astragali, oxymatrine, artemisinin and artesunate, and wogonin. Thus, TCM is a potential candidate for anti-HBV drugs. More information is needed regarding TCMs, including preparation, standardization, identification of active ingredients, and toxicological evaluation. Therefore, TCM development needs to apply advanced and interdisciplinary methodology and technology and perform further rigorously designed experimental and clinical investigations.