Introduction: Xuebijing injection (XBJ), a traditional Chinese herbal medicine (TCHM), containing five TCM ingredients, is commonly administered intravenously in clinical practice in China. It has been widely used to treat various serious infectious diseases, such as viral pneumonia, bacterial pneumonia, and sepsis. We aimed to summarize the advanced research progress of XBJ in clinical applications and mechanisms, and promote the applications and development of TCHM in clinical practice. Methods: In this systematic review, we searched XBJ-related articles from the last 20 years until 2023, and 90 studies were finally included. We reviewed the latest research progress regarding the mechanisms of action of XBJ in clinical applications, transforming the available data into a summarized reference for target/disease specific XBJ mechanisms of action. Results: XBJ has exact curative effect in major viral infections or inflammatory diseases. The possible mechanisms of action may include: (1) Exerts antiviral effects by preventing the virus from entering cells, replicating, and releasing through important targets, such as ACE2 and AKT1; (2) Reduces inflammatory factors [(interleukin)IL -2, IL-4, tumor factor α (TNF-α), etc.] and oxidative stress by regulating PI3K-AKT, nuclear factor kappa B(NF-κB), mitogen-activated protein kinase (MAPK), Toll-like receptor and other signaling pathways; (3) Involves in protecting cells, stabilizing hemodynamics, regulating body metabolism and immune function, etc. Conclusion: XBJ can act on multiple targets and signaling pathways for antiviral and anti-inflammatory, which has definite curative effect, high safety and few adverse effects, and is worthy of promotion of clinical application.