This paper is a systematic review of evidence-based studies of the effectiveness of Chinese herbal medicine (CHM) in the treatment of liver cancer. After a detailed analysis of the literature, five animal studies and four human clinical trials met the criteria for inclusion. Analysis revealed that results of the clinical trials, whilst encouraging, need to be interpreted with caution as problems with study designs may lead to apparent benefits being attributable to various forms of bias. However, as each of the CHM agents used in these studies appeared to be potentially beneficial, further well-designed and controlled randomized clinical trials are warranted. The second part of this review focused on the lessons learned from the relationships between Traditional Chinese Medicine (TCM) theory, TCM Syndrome Differentiation, and modern scientific understanding of mechanisms of action of CHM agents. The understanding of TCM Syndrome Differentiation may allow identification of different patterns of disharmony and may provide important guidance to the prescription of CHM. Furthermore, quality control using both biological and chemical fingerprinting of CHM is important to ensure batch-to-batch consistency to deliver sustained therapeutic benefit. Also, careful assessment of herb-drug interactions is paramount for safety and integrative use of western chemotherapeutic and CHM agents.