Psoriasis is a chronic, painful, disfiguring and non-contagious skin disease that has globally affected at least 200 million patients. In general, mild to moderate psoriasis patients will be treated by chemical drugs or Chinese medicine, while targeting systemic biological drugs have been successfully developed with good efficacy but high cost burden to patients with severe psoriasis. Since the underlying mechanisms of psoriasis are not well understood, in this review, psoriasis pathogenesis and clinical therapeutic principles by modern medicine and Chinese medicine are extensively described. Based on the data from the China Food and Drug Administration, the majority of chemical drugs are utilized as the topical formulations, while Chinese medicines are mainly delivered by an oral route, suggesting that the market for topical preparations of Chinese medicine to treat psoriasis is worth to exploration. Moreover, considering the unique clinical therapeutic theory and successful clinical application of Chinese medicine in the treatment of psoriasis, we believe that development of new small molecule drugs based on Chinese medicine will be a promising strategy to reduce therapeutic costs and improve safety for psoriatic patients.