Yinchenhao decoction (YCHD), comprising Yinchenhao (Artemisiae Scopariae Herba), Zhizi (Gardeniae Fructus) and Dahuang (Radix Rhei et Rhizoma), is widely used for treating various diseases. We aimed to investigate the bile acid metabolic mechanism of YCHD in dimethylnitrosamine (DMN)-induced liver fibrosis model. Rats received DMN (10 mg/kg, intraperitoneally) for four successive weeks for liver fibrosis induction and were treated with YCHD for the last 2 weeks. Histopathological analysis showed that YCHD prevented DMN-induced histopathological changes in liver tissues. Serum liver function in YCHD group improved. Ultraperformance liquid chromatography-mass spectrometry analysis showed that YCHD significantly restored both free and conjugated bile acid levels increased by DMN, to normal levels. RT-qPCR results showed that YCHD treatment upregulated the expression of genes related to bile acid synthesis, reabsorption, and excretion. Western blotting analysis showed that YCHD downregulated α-SMA, TGF-β1, p-Smad3, and p-ERK1/2 expression in chenodeoxycholic acid (CDCA)-activated hepatic stellate cells (HSCs). The viability of CDCA-activated HSCs significantly increased after treatment with YCHD and PD98059 (an ERK inhibitor) compared to YCHD treatment alone. Our findings suggest that YCHD alleviated DMN-induced liver fibrosis by regulating enzymes responsible for bile acid metabolism. Additionally, it inhibits CDCA-induced HSC proliferation and activation via TGF-β1/Smad/ERK signalling pathway.