Fast development of combination of nanotechnology with traditional Chinese medicine (TCM) broadens the field of application of TCM. Besides, it increases the research ideas and contributes to TCM modernization. As expected, TCM will be developed into the nanodrug delivery system by nanotechnology with careful design, which will enhance the medicinal value of TCM to cure and prevent disease based on benefits brought by nanometer scale. Here, formulations, relevant preparations methods, and characteristics of nano-TCM were introduced. In addition, the main excellent performances of nano-TCM were clearly elaborated. What is more, the review was intended to address the studies committed to application of nanotechnology in TCM over the years, including development of Chinese medicine active ingredients, complete TCM, and Chinese herbal compounds based on nanotechnology. Finally, this review discussed the safety of nano-TCM and presented future development trends in the way to realize the modernization of TCM. Overall, using the emerging nanotechnology in TCM is promising to promote progress of TCM in international platform. Recent researches on modernization of traditional Chinese medicine (TCM) urged by nanotechnology are introduced, and formulations, advantages, and applications of nano-TCM are reviewed to provide strong proofs.