Objective The aim of the current study was to investigate the protective effect of Yangyin Yiqi Mixture (YYYQ) on Bleomycin-induced pulmonary fibrosis in rats based on TGF-β1/Smad signal pathway and epithelial to mesenchymal transition (EMT). Methods 120 Wistar rats were randomly divided into six groups: control group, BLM group, BLM + Pred group, BLM+YYYQ-L group, BLM+YYYQ-M group, and BLM+YYYQ-H group. Rats were given an intratracheal instillation of 3 mg/kg BLM to establish the pulmonary fibrosis model and followed by different dosages of YYYQ (11, 22, 44g/kg, via intragastric gavage) or prednisone soluble (4.2mg/kg, via intragastric gavage) or water. After 14 days and 28 days, tissue sections were stained with hematoxylin-eosin and Masson's trichrome to observe histopathological changes. Protein levels of TGF-β1, CTGF, Interleukin 18, and hydroxyproline were detected by ELISA method, and mRNA expressions of TGF-β1, TβRI, TβRII, Smad3, Smad7, α-SMA, E-cadherin, laminin, and collagen I were detected by RT-PCR. Results TGF-β1, CTGF, Interleukin 18, and hydroxyproline levels and mRNA expression of TGF-β1, TβRI, TβRII, Smad3, α-SMA, laminin, and collagen I were significantly increased (p <0.01), while Smad7 and E-cadherin levels were significantly decreased in BLM group (p <0.01). YYYQ-M and YYYQ-H group had downregulated the TGF-β1, CTGF, hydroxyproline contents, and mRNA expression of TGF-β1, TβRI, TβRII, Smad3, α-SMA, laminin, and collagen I and upregulated mRNA levels of Smad7 and E-cadherin significantly (p <0.01 or p <0.05). The result from the present study, which was also supported by histological evidence, suggested that YYYQ-M group and YYYQ-H group exhibited better treatment effect on Bleomycin-induced pulmonary fibrotic rats when compared to that of BLM + Pred group (p <0.01). Meanwhile, the effect of YYYQ, in three different dosages, on the level of interleukin 18 was not significant. Conclusion These results showed that YYYQ has the potential of ameliorating the progression of pulmonary fibrosis, and the mechanism may be related to suppressing TGF-β1/Smad signal pathway and EMT in BLM-induced pulmonary fibrosis of rats.