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Objective: Chinese herbal medicine (CHM) is quite popular in Asia. The purpose of this study is to investigate the benefits of decreasing the risk of cirrhosis in patients with non-alcoholic fatty liver disease (NAFLD) by using CHM. Design: We performed a 1:3 propensity score-matched cohort study to analyze patients with NAFLD diagnosed between January 1, 1997 and December 31, 2011 through the Taiwanese National Health Insurance Research Database. Patients who received CHM therapy from the initial date of diagnosis of NAFLD to December 31, 2011 were included in the CHM group. Patients who were not treated with CHM during the same interval were categorized in the non-CHM group. Cox regression model was used to adjust for sex, age, comorbidities, and drug use. Hazard ratios were also compared between the two groups. Results: A total of 13,072 patients were identified after 1:3 propensity score matching. The patients had similar basic characteristics. A lower cumulative incidence of cirrhosis was found in the CHM cohort (log-rank test, p < 0.0001). Finally, 176 patients in the CHM cohort (4.66 per 1000 person-years) and 582 patients in the non-CHM cohort (7.92 per 1000 person-years) developed cirrhosis (adjusted hazard ratios 0.63, 95% confidence interval 0.53–0.75). The effect of CHM to lower cirrhosis incidence was independent of sex, drug use, and comorbidities, including diabetes mellitus, hypertension, and cardiovascular diseases. Patients older than 40 years of age and without comorbidities such as chronic obstructive pulmonary disease, hyperlipidemia, alcoholism, tobacco use, or obesity also benefited from CHM. Conclusions: Our study is the first large-scale investigation in Taiwan that shows the association between patients with NAFLD and cirrhosis prevention after CHM intervention. The results may be useful for treatment and for decision making for patients and clinical doctors. Further restricted trials are needed to support our findings. [ABSTRACT FROM AUTHOR]