Background/Objectives: Silicosis is a chronic disease caused by long-term exposure to high levels of silica dust, which leads to extensive nodular fibrosis in the lungs. The disease is currently a serious occupational health hazard globally. Xuanfei Baidu decoction (XFBD) is a mature Chinese herbal medicine in China that has shown anti-inflammatory and anti-fibrotic effects in mouse experiments, making it a promising candidate for addressing the persistent inflammation and fibrosis in silicosis. Methods: Silicosis was induced in male C57BL/6J mice using crystalline silica (CS). XFBD’s early anti-inflammatory role was verified in vitro in peritoneal macrophages (PMs) and in vivo in silicosis mice, while its late anti-collagen deposition and anti-fibrotic activities were further investigated. Results: In vitro, XFBD effectively inhibits the activation of the NOD-like receptor thermal protein domain-associated protein 3 (NLRP3) inflammasome in CS-induced lipopolysaccharide (LPS)-primed PMs, decreases the release of inflammatory cytokines, including interleukin (IL)-1β, IL-6, and tumor necrosis factor-α (TNF-α), and modulates the phenotypic transition of macrophages from the M2 to the M1 phenotype. In vivo studies further validated that XFBD significantly downregulates the expression of NLRP3 and Cleaved-Caspase-1 proteins in the lung tissues of mice afflicted with silicosis. Additionally, XFBD enhanced pulmonary function, inhibited collagen deposition and pulmonary fibrosis in silicosis mice, and reversed epithelial–mesenchymal transition (EMT) by regulating key EMT-related proteins to slow fibrosis. Conclusions: The beneficial effects of XFBD on CS-induced pulmonary fibrosis can be attributed to the induction of macrophage polarization-mediated anti-inflammatory responses during the early stage of fibrotic development, as well as its anti-collagen deposition and anti-fibrotic activities during the intermediate stage of fibrotic development. This study provides preclinical evidence supporting XFBD as a promising candidate for prevention or adjunctive therapy, and its multi-target, time-phase mechanism offers a novel rationale and theoretical foundation for the development of new strategies against silicosis.