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Background: Previous researches have demonstrated that the traditional Chinese medicine could therapeutically treat inflammatory and hypoxic diseases by enhancing the functionality of mesenchymal stem cells. However, its mechanism was not yet clear. This research aimed to investigate the impact of the traditional Chinese medicine Sijunzi decoction and its herb monomer ginsenoside Rg1 on the proliferation and differentiation of human umbilical cord mesenchymal stem cells (hUC-MSCs) and explore the underlying mechanisms., Methods: Different concentrations of Sijunzi decoction and Rg1 were applied to differentiating induced hUC-MSCs. The CCK-8 test was utilized to evaluate cell proliferation activity and identify suitable drug concentrations. Alizarin Red staining was employed to detect the formation of calcium nodules, and Oil Red O staining was used to assess the formation of lipid droplets. PCR was utilized to examine gene expression related to osteogenic differentiation, adipogenic differentiation, and the HIF-1α signaling pathway in hUC-MSCs. Western blot analysis was conducted to evaluate protein expression in osteogenic differentiation and HIF-1α. ELISA was performed to measure HIF-1α signaling factors and inflammatory cytokine expression. Biochemical assays were used to assess changes in oxidative stress indicators., Results: The Sijunzi decoction and Rg1 both demonstrated a dose-dependent promotion of hUC-MSC proliferation. The Sijunzi decoction significantly increased the expression of genes and proteins relevant to osteogenesis, such as osterix, osteocalcin, RUNX2, and osteopontin, and activated the HIF-1α pathway in hUC-MSCs. (P < .05). Similar effects were observed at the gene level after treatment with Rg1. Simultaneously, Sijunzi decoction significantly reduced the secretion of pro-inflammatory cytokines TNF-α, IL-6, and IL-1β, while increasing the secretion of the anti-inflammatory cytokine IL-10 during osteogenic differentiation (P < .05). Moreover, Sijunzi decoction lowered oxidative stress levels and enhanced the antioxidant capacity of hUC-MSCs during osteogenic differentiation (P < .05). However, the impact of Sijunzi decoction on hUC-MSCs toward adipogenic differentiation was not significant (P > .05)., Conclusion: Sijunzi decoction promotes the proliferation and osteogenic differentiation of hUC-MSCs, potentially through the activation of the HIF-1α signaling pathway and by modulating the microenvironment via reducing inflammation and oxidative stress levels. Rg1 might be involved in this process., Competing Interests: The authors have no conflicts of interest to disclose., (Copyright © 2024 the Author(s). Published by Wolters Kluwer Health, Inc.)