Objective To examine the efficacy of Chaihu-huaji decoction combined with transarterial chemoembolization (TACE) in unresectable hepatocellular carcinoma (HCC) patients. Methods We retrospectively reviewed the data of 125 HCC patients treated in Chongqing Cancer Hospital between January 2012 and December 2014, including 64 patients who received Chaihu-huaji decoction and TACE (Chaihu-huaji group) and 61 patients who received only TACE (control group). The patients were examined until the last follow-up or death. Complications, hepatotoxicity, and nephrotoxicity were compared between the two groups. Results Fever, nausea, vomiting, poor appetite, and leukocytopenia were alleviated in patients who received Chaihu-huaji decoction, and no cases of significant hepatic and renal toxicities related to the herbal medicine were observed in the Chaihu-huaji group. The 3-year overall survival probability was significantly higher in the Chaihu-huaji group (26.47%) than in the control group (13.06%). Conclusion Chaihu-huaji decoction may prevent adverse events after TACE and prolong overall survival of unresectable HCC patients when combined with TACE.