Dementia is a leading cause of mental and physical disability. Vascular dementia (VaD) is the second most common cause of dementia after Alzheimer's disease (AD) constituting 10–15% of the dementia population. Currently there are no approved pharmaceutical options for VaD and the conventional anti-AD therapies provide only modest, short-term relief of symptoms associated with VaD. Herbal medicines have been used for the management of dementia-like symptoms for centuries and may provide viable therapies for VaD due to their multicomponent and multitarget approach. This review is designed to provide an updated overview on the current status of herbal medicine research, with an emphasis on Chinese herbal medicine, for the treatment of VaD or dementia. A case study is also provided to demonstrate the development process of a novel standardized complex herbal formulation for VaD. The article reveals some preliminary evidence to support the use of single and complex herbal preparations for VaD and dementia. Multiple issues in relation to clinical and preclinical research have been identified and future research directions are discussed.