Abstract: Fermented traditional Chinese medicine (FTCM) represents a distinctive processing technology in traditional Chinese medicine (TCM), with fermented traditional Chinese medicine decoction pieces playing an indispensable role in TCM practice. Despite its significance, the development of FTCM has long been constrained by non-standardized processing techniques, undefined fermentation parameters and outdated quality evaluation systems. To overcome these challenges, it is essential to systematically elucidate the mechanisms underlying toxicity reduction and efficacy enhancement during fermentation. In particular, we aim to clarify a hierarchical regulatory network linking fermentation microbiota, active ingredients, pharmacological effects and traditional use. Although considerable progress has been made, the mechanisms underlying most FTCM remain insufficiently characterized, largely due to the lack of unified research frameworks, thereby hampering the standardization of quality control. Therefore, this article systematically reviews the related research published in domestic and foreign journals on fermentation mechanisms of FTCM, summarizes advances in research strategies and methodological approaches, provide theoretical frameworks and methodological references for future investigations into the processing mechanisms of FTCM.