Abstract: This paper systematically reviews the pivotal role of artificial intelligence (AI) in driving the modernization of Traditional Chinese Medicine (TCM). Focusing on four key domains—material basis and mechanism elucidation, intelligent prescription optimization, pharmaceutical engineering and industrial transformation, and knowledge engineering with large language models—this study analyzes how AI reshapes TCM research paradigms through data-driven modeling, multimodal integration, and system-level reasoning. The findings indicate that AI is accelerating the transition of TCM from an experience-based paradigm to a data-driven and intelligent decision-making framework, significantly enhancing quantification and interpretability in mechanism analysis, prescription design, and quality control. However, the maturity of AI applications varies across different domains, and challenges remain in model interpretability, knowledge standardization, and ethical governance. Future research should focus on developing multimodal and multi-scale integrated intelligent models, as well as establishing a coordinated framework that aligns technological advancement with ethical considerations, in order to improve the reliability and verifiability of AI-enabled TCM research.