Neurodegenerative diseases are threating our health seriously. Inflammation plays an important role in the initiation and development of neurodegenerative diseases, and its primary characteristics are the activation of microglia and the increasing level of inflammation cytokines. This review describes the relationship between neuroinflammation and several neurodegenerative diseases, and the models in vivo and in vitro. In addition, combining with traditional Chinese medicines knowledge of encephalopathy, we summarizes pharmacological effects and mechanisms of multiple herb extracts and monomer compounds in preventing the activation of microglia and inhibiting neuroinflammation, thus, to provide the basis for gradually revealing the related rules and characteristics of treating encephalopathy by traditional Chinese medicine, and improving the accuracy of the clinical drugs, as well as developing new drugs for the prevention and control of encephalopathy.