Gastric cancer (GC) is a common gastrointestinal tumor. Gastric precancerous lesions (GPL) are the last pathological stage before normal gastric mucosa transforms into GC. However, preventing the transformation from GPL to GC remains a challenge. Traditional Chinese medicine (TCM) has been used to treat gastric disease for millennia. A series of TCM formulas and active compounds have shown therapeutic effects in both GC and GPL. This article reviews recent progress on the herbal drugs and pharmacological mechanisms of TCM in preventing the transformation from GPL to GC, especially focusing on anti-inflammatory, anti-angiogenesis, proliferation, and apoptosis. This review may provide a meaningful reference for the prevention of the transformation from GPL to GC using TCM.