Traditional Chinese medicines (TCM) have been used in China for thousands of years. Although TCM has been generally perceived to be safe, adverse reactions to Chinese materia medica (CMM) have been reported. Most of the adverse reactions are allergic in nature, but other mechanisms may play a role. This review focuses on the mechanism and clinical presentation of these allergic reactions. Allergic reactions can occur as a result of the active and inactive ingredients of CMM. Impurities and chemicals generated during the production process can also lead to allergic or adverse reactions. Environmental factors such as temperature, humidity, and light can cause changes in the allergenicity of drugs. Human error in formulating CMM drugs also contributes to adverse drug reactions. The management of allergic reactions to CMM includes taking a good history, avoidance of medications in the same class as those which caused prior reactions, the proper training of staff, adherence to manufacturer guidelines and expiration dates, evaluation of benefit and risk balance, and the formulation of a risk management strategy for the use of CMM. A small test dose of a considered drug before using, improvements in drug purification technology, and proper storage and clinical administration help reduce allergic reactions due to CMM.