Depression is a common psychiatric disorder under the category of depression syndrome in Traditional Chinese Medicine (TCM) theory. Meanwhile, Xiaochaihu Decoction is a classical TCM formulation regulating Qi, resolving and dissipating stagnation. Clinically, the formulation has long been adopted to treat Shaoyang stagnation syndrome for depression syndrome. In this review, potential targets of action and the corresponding pathways of Xiaochaihu Decoction are explored for depression treatment via network pharmacology. The article also systematically summarizes the active components and pharmacological mechanisms of seven Chinese herbal medicine components in Xiaochaihu Decoction and guides the future study direction of Xiaochaihu Decoction, which may serve a promising treatment for depression.