Background. Vascular damage is a major consequence of bone fracture. Taohong Siwu decoction (TSD) can raise the expression of vascular endothelial growth factor (VEGF) in fracture healing. However, its molecular mechanism in promoting angiogenesis is still unknown. The aim of this study was to investigate the potential mechanisms of TSD in the regulation of osteo-angiogenesis in fracture healing. Methods. A rat tibial fracture model was established. After low- (4.5 g·kg−1), medium- (9 g·kg−1), and high-dose TSD (18 g·kg−1) and panax notoginsenoside (25 mg kg−1) treatment, hematoxylin-eosin staining was employed to visualize pathological changes in bone tissues. The levels of cytokines (interleukin (IL)-2, tumor necrosis factor-α (TNF-α), IL-6, and IL-1β), thromboxane B2 (TXB2), and 6 ketone prostaglandin F1α (6-Keto-PGF1α) were quantified by enzyme-linked immunosorbent assay (ELISA). Immunofluorescence was used to identify the rat aortic endothelial cells (RAECs). Control serum, 10% TSD-containing serum, and 10% TSD-containing serum combined with hypoxia-inducible factor-1α (HIF-1α) inhibitor were used to treat the RAECs and rat osteoblasts. Transwell migration assay was utilized to examine the migration of the RAECs. The Matrigel tubulogenesis assay was used for the assessment of angiogenesis. The expression of angiogenesis- (von Hippel-Lindau tumor suppressor (VHL), HIF-1α, VEGF, angiopoietin-2 (Ang-2), and pVHL) and osteogenesis-related (alkaline phosphatase (ALP), runt-related transcription factor 2 (Runx2), and osteopontin-1 (OPN-1)) protein and gene was detected by western blot and quantitative real-time PCR (qRT-PCR). Results. Compared with the model group, TSD increased the trabecular bone areas, numbers, and thicknesses in fractured rats. In the plasma, the levels of cytokines and TXB2 in the middle- and high-dose TSD group were significantly lower than those in the model group (
P
<
0.01
). The 6-keto-PGF1α content was increased by middle- and high-dose TSD intervention (
P
<
0.01
). Compared to the control serum group, the angiogenesis and migration of the RAECs were enhanced in the TSD group (
P
<
0.001
). The expression of HIF-1α, VEGF, and Ang-2 in the TSD group upregulated significantly (
P
<
0.001
). VHL and pVHL were inhibited under TSD-containing serum treatment (
P
<
0.001
). ALP, Runx2, and OPN-1 were increased obviously in the TSD group (
P
<
0.001
). Nevertheless, the HIF-1α inhibitor reversed these changes (
P
<
0.001
). Conclusion. TSD promotes angiogenesis and osteogenesis by regulating the HIF-1α signaling pathway. Meanwhile, it can effectively reduce the risk of inflammation and improve blood circulation.