Background. Clinically, the traditional Chinese medicine compound Gujiansan has been widely used in the treatment of steroid-induced avascular necrosis of the femoral head (SANFH). The present study aimed to investigate the mechanisms underlying the therapeutic effect of Gujiansan. Methods. A rat model of SANFH was established by the injection of dexamethasone (DEX) at a high dosage of 25 mg/kg/d. Then, Gujiansan was intragastrically administered for 2 weeks, 4 weeks, and 8 weeks, and histological examination of the femoral head was performed. The expression levels of related mRNAs and proteins were analyzed by qRT-PCR, Western blotting, and immunohistochemistry, and the levels of bone biochemical markers and cytokines were detected with ELISA kits. Results. Gujiansan administration ameliorated SANFH and induced the expression of hypoxia-inducible factor-1α (HIF-1α), Bcl-2/adenovirus E1B 19 kDa interacting protein 3 (BNIP3), LC3, and Beclin-1 in the rat model in a dose- and time-dependent manner, and Gujiansan promoted osteocalcin secretion at the femoral head. In addition, Gujiansan increased the levels of bone formation- and bone resorption-specific markers (osteocalcin (OC), bone-specific alkaline phosphatase (BAP), tartrate resistant acid phosphatase-5b (TRACP-5b), N-terminal telopeptides of type I collagen (NTX-1), and C-terminal telopeptide of type I collagen (CTX-1)) and decreased the levels of proinflammatory cytokines (TNF-α, IL-6, and CRP) in a dose- and time-dependent manner. Conclusions. Gujiansan accelerates the formation of a new bone, promotes the absorption of the damaged bone, inhibits the inflammatory response, induces autophagy of the femoral head via the HIF-1α/BNIP3 pathway, and ultimately ameliorates SANFH.