Nano traditional Chinese medicine (nano TCM) refers to bioactive ingredients, bioactive parts, medicinal materials or complex prescription, being approximately 100 nm in size, which are processed by nanotechnology. Nano TCM is a product of the TCM modernization, and is an application of nanotechnology in the field of TCM. This article reviews literatures on researches of nano TCM, which were published in the past 15 years. Different nanotechnologies have been used in preparation of Nano TCM in view of the varying aims of the study. The mechanical crushing technology is the main approach for nanolization of TCM material and complex prescription, and nanoparticulate drug delivery systems is the main approach for nanolization of bioactive ingredients or bioactive parts in TCM. Nano TCM has a number of advantages, for example, enhancing the bioavailability of TCM, reducing the adverse effects of TCM, achieving sustained release, attaining targeted delivery, enhancing pharmacological effects and improving the administration route of TCM. However, there are still many problems that must be resolved in nano TCM research. The main challenges to nano TCM include the theory system of TCM modernization, preparation technology, safety and stability, etc.