PHY906 (KD018) is a four-herb Chinese Medicine Formula. It has been shown to potentially enhance the therapeutic indices of different class anticancer agents in vivo. Here, PHY906 is reported to enhance the anti-tumor activity of Sorafenib in nude mice bearing HepG2 xenografts. Among the four herbal ingredients of PHY906, Scutellaria baicalensis Georgi (S) and Paeonia lactiflora Pall (P) are required; however, S plays a more important role than P in increasing tumor apoptosis induced by Sorafenib with an increase of mouse(m)FasL and human(h)FasR expression. PHY906 may potentiate Sorafenib action by increasing hMCP1 expression and enhancing infiltration of macrophages into tumors with a higher M1/M2 (tumor rejection) signature expression pattern, as well as affect autophagy by increasing AMPKα-P and ULK1-S555-P of tumors. Depletion of macrophage could counteract PHY906 to potentiate the anti-tumor activity of Sorafenib. It was reported that tumor cells with higher levels of ERK1/2-P are more susceptible to Sorafenib, and the S component of PHY906 may increase ERK1/2-P via inhibition of ERK1/2 phosphatase in HepG2 tumors. PHY906 may potentiate the anti-hepatoma activity of Sorafenib by multiple mechanisms targeting on the inflammatory state of microenvironment of tumor tissue through two major ingredients (P and S) of PHY906.