Ethnopharmacological relevance: Timely intervention in hepatic fibrosis (HF) is imperative to reduce mortality associated with cirrhosis and prevent progression to hepatocellular carcinoma. Bao Gan Ning Decoction (BGN), a Traditional Chinese Medicine formula, demonstrates therapeutic efficacy against HF. However, its mechanism of action remains incompletely defined. Aim of the study: To elucidate the mechanistic role of BGN in attenuating HF through modulation of specific gut microbiota taxa and bile acid (BA) metabolism. Materials and methods: HF was induced in mice using CCl<inf>4</inf>. Gut microbiota composition was analyzed using 16S rRNA gene sequencing. Hepatic BA profiles were quantified using LC-MS/MS, targeting 53 specific BA in negative ion mode through multiple reaction monitoring. Complementary histopathological, molecular, and functional analyses were performed. Results: The findings indicate that BGN mediates remodelling of the gut microbiota by enriching probiotic taxa (Lactobacillus, Bifidobacterium) and depleting pathobionts. Furthermore, BGN attenuates fibrosis by increasing anti-fibrotic BA levels (e.g., ursodeoxycholic acid) while reducing hepatotoxic BA; it activates the PPARα/CYP7A1 signalling axis to upregulate hepatointestinal BA transporters (Slc10a1/NTCP, ABCB11/BSEP, OSTα/β, Slc10a2/ASBT). Conclusions: BGN alleviates HF through gut microbiota-dependent restoration of BA homeostasis and activation of the PPARα/CYP7A1 pathway. This study provides novel mechanistic insights into BGN's anti-fibrotic activities, positioning it as a microbiota-modulating therapeutic candidate for HF management.