Osteoporosis (OP) is a highly prevalent orthopedic condition in postmenopausal women and the elderly. Currently, OP treatments mainly include bisphosphonates, receptor activator of nuclear factor kappa-B ligand (RANKL) antibody therapy, selective estrogen receptor modulators, teriparatide (PTH1-34), and menopausal hormone therapy. However, increasing evidence has indicated these treatments may exert serious side effects. In recent years, Traditional Chinese Medicine (TCM) has become popular for treating orthopedic disorders. Erxian Decoction (EXD) is widely used for the clinical treatment of OP, but its underlying molecular mechanisms are unclear thanks to its multiple components and multiple target features. In this research, we designed a network pharmacology method, which used a novel node importance calculation model to identify critical response networks (CRNs) and effective proteins. Based on these proteins, a target coverage contribution (TCC) model was designed to infer a core active component group (CACG). This approach decoded the mechanisms underpinning EXD’s role in OP therapy. Our data indicated that the drug response network mediated by the CACG effectively retained information of the component-target (C-T) network of pathogenic genes. Functional pathway enrichment analysis showed that EXD exerted therapeutic effects toward OP by targeting PI3K-Akt signaling (hsa04151), calcium signaling (hsa04020), apoptosis (hsa04210), estrogen signaling (hsa04915), and osteoclast differentiation (hsa04380) via JNK, AKT, and ERK. Our method furnishes a feasible methodological strategy for formula optimization and mechanism analysis and also supplies a reference scheme for the secondary development of the TCM formula.