Traditional Chinese medicine (TCM) has been increasingly used for the treatment of dyslipidemia and cardiovascular disease. Recently, much progress has been made in studies on the mechanisms of action of the lipid-regulating effect of TCM in animal experiments. Current researches showed that the lipid-regulating effect of TCM may be related to the following actions: (1) inhibiting intestinal absorption of lipids; (2) reducing the biosynthesis of endogenous lipids; (3) increasing the catabolism of lipid, sterol substances in live system; (4) increasing the secretion of sterol substances in live system; (5) regulating transcription factors related to lipid metabolism. This paper provides an overview of the recent advances and discusses their implications in future development of lipid-lowering drugs from TCM.