Rare diseases have become a global public health challenge due to their low prevalence, difficult diagnosis, and limited treatment options. Intractable diseases are more common but often involve complex mechanisms, treatment with limited efficacy, and high medical costs, placing a heavy burden on patients and healthcare systems. In recent years, traditional Chinese medicine (TCM) has demonstrated unique advantages in the treatment of intractable and rare diseases and has gradually become an important complementary treatment. The current work is a systematic review of the progress of clinical and experimental research on TCM in typical rare diseases such as amyotrophic lateral sclerosis (ALS), systemic lupus erythematosus (SLE), mitochondrial encephalomyopathy, aplastic anemia (AA), and Wilson's disease (WD). It focuses on the multi-target therapeutic mechanisms of key Chinese herbal compound formulas, including immune regulation, antioxidative stress, and neuroprotection. The core TCM theories of "syndrome differentiation", "different treatments for the same disease" and the "same treatment for different diseases" are also discussed in the context of personalized medicine. In recent years, China has continuously promoted the development of TCM through a series of national plans and supportive policies, such as the 14th Five-Year Plan for TCM development, funding for key special projects, expedited approval pathways, and expanded coverage by medical insurance. These efforts have provided strong support for the clinical translation of TCM and technological innovation in the field of intractable and rare diseases. Notwithstanding the encouraging advances, the field of Chinese medicine continues to grapple with numerous challenges. In the future, the enhancement of mechanistic studies and quality multicenter clinical trials needs to be promoted while further enhancing policy support and international collaboration to substantiate the scientific basis and clinical value of TCM in the prevention and treatment of intractable and rare diseases.