Intestinal fibrosis, a common complication of inflammatory bowel disease, in particular in Crohn’s disease, arises from chronic inflammation, leading to intestinal narrowing, structural damage, and functional impairment that significantly impact patients’ quality of life. Current treatment options for intestinal fibrosis are limited, with surgery being the primary intervention. Traditional Chinese Medicine (TCM) has emerged as a promising approach in preventing and treating intestinal fibrosis. However, there is a scarcity of literature summarizing the mechanisms underlying TCM’s efficacy in this context. To address this gap, we conducted a comprehensive review, uncovering multiple mechanisms through which TCM mitigates intestinal fibrosis. These mechanisms include immune cell balance regulation, suppression of inflammatory responses, reduction of inflammatory mediators, alleviation of colon tissue damage, restoration of intestinal function, modulation of growth factors to inhibit fibroblast activation, dynamic regulation of TIMPs and MMPs to reduce extracellular matrix deposition, inhibition of epithelial–mesenchymal transition and endothelial–mesenchymal transition, autophagy modulation, maintenance of the intestinal mucosal barrier, prevention of tissue damage by harmful factors, and regulation of cell proliferation and apoptosis. This study aims to bridge existing knowledge gaps by presenting recent evidence supporting the utilization of TCM in both clinical and experimental research settings.