Active pharmaceutical ingredients (APIs) extracted and isolated from traditional Chinese medicines (TCMs) are of interest for drug development due to their wide range of biological activities. However, the overwhelming majority of APIs in TCMs (T-APIs), including flavonoids, terpenoids, alkaloids and phenolic acids, are limited by their poor physicochemical and biopharmaceutical properties, such as solubility, dissolution performance, stability and tabletability for drug development. Cocrystallization of these T-APIs with coformers offers unique advantages to modulate physicochemical properties of these drugs without compromising the therapeutic benefits by non-covalent interactions. This review provides a comprehensive overview of current challenges, applications, and future directions of T-API cocrystals, including cocrystal designs, preparation methods, modifications and corresponding mechanisms of physicochemical and biopharmaceutical properties. Moreover, a variety of studies are presented to elucidate the relationship between the crystal structures of cocrystals and their resulting properties, along with the underlying mechanism for such changes. It is believed that a comprehensive understanding of cocrystal engineering could contribute to the development of more bioactive natural compounds into new drugs.