Traditional Chinese medicine (TCM) is an alternative method of therapy that can be administered in oral, topical, or injectable forms. It emphasizes the importance of using many herbs that are combined in different formulations for each individual patient. Among some segments of the patient population, it has become increasingly popular as a mode for treating dermatologic diseases. As a result, it is now worthwhile for dermatologists throughout the West to gain some familiarity with this method. Yet, dermatologists are largely unfamiliar with TCM and may possess some misconceptions. We attempt to give a general overview of TCM through the discussion of different clinical studies involving various TCMs. Some proposed mechanisms of action of TCM are also presented. A discussion of adverse effects, including hepatotoxic effects and the need for close monitoring is discussed. A warning regarding the possible contamination of TCMs is also included. Since it is not possible to discuss the application of TCM for every skin disorder, psoriasis and atopic dermatitis are used as the prototype in illustrating the use of TCM. In the future, perhaps a better understanding of TCM will be gained through more systematic analysis and controlled studies with a placebo arm. It is our hope that this article will provide an overview of the efficacy, mechanism of action, as well as adverse effects of TCM.