This study aims to investigate the mechanism by which modified Xiangsha Liujunzi Decoction (M-XS) ameliorates hepatic inflammation in hyperlipidemic mice by regulating the intestinal high-density lipoprotein 3 (HDL3) level. Intestine-specific ATP-binding cassette transporter A1 (ABCA1) knockout mice (Abcal-Villin-cre-Tg) were randomized into 3 groups (n = 8): intestine-specific knockout group (Abcal^△Vill), intestine-specific knockout mice fed a high-fat diet group (Abcal^△Vill + HFD), and intestine-specific knockout with Chinese herbal medicine intervention group (Abcal^△Vill + HFD + M-XS). Littermate control mice were randomly allocated into 3 groups (n = 8): blank group (Abcal^fl/fl), high-fat diet group (Abcal^fl/fl+HFD), and Chinese herbal medicine intervention group (Abcal^fl/fl +HFD+M-XS). Except the Abcal^fl/fl and Abcal^△Vill groups, the other groups were fed a HFD for 10 weeks. Drug administration lasted for 6 weeks at a dose of 23.66 g·kg^-1·d^-1. Serum lipid profiles (four items), hepatic histopathology (HE and oil red O staining), and ileal histopathology (HE staining) were assessed. Ileal HDL3 levels were measured by ELISA, hepatic triacylglycerol (TG) levels by the GPO-PAP method, and co-localization of CD86 and Toll-like receptor 4 (TLR4) in the liver tissue by immunofluorescence. The mRNA levels of hepatic lipopolysaccharide-binding protein (LBP), nuclear factor kappa-light-chain-enhancer of activated B cells p65 (NF-κB p65), inhibitor of nuclear factor kappa-B alpha (IκBα), interleukin-6 (IL-6), tumor necrosis factor-alpha (TNF-α), and interleukin-1 beta (IL-1β) were determined by real-time PCR. The protein levels of ABCA1 and apolipoprotein A-I (apoA-I) in the ileum, as well as LBP, p-NF-κB, p-IκBα, IL-6, TNF-α, and IL-1β in the liver, were assessed by Western blot. Compared with the Abcal^fl/fl group, the Abcal^fl/fl +HFD group showed increased blood lipid levels, numerous vacuoles and lipid droplets in the liver, shortened intestinal villi, elevated hepatic TG level, reduced levels of HDL3, ABCA1, and apoA-I in the ileum, co-localization of CD86 and TLR4 in the liver, and up-regulated mRNA levels of LBP, NF-κB, IκBα, IL-6, TNF-α, and IL-1β as well as protein levels of LBP, p-NF-κB, p-IκBα, IL-6, TNF-α, and IL-1β in the liver (P<0.05). Compared with the Abcal^fl/fl +HFD group, the Abcal^fl/fl +HFD+M-XS group showed decreased blood lipid levels, reduced vacuoles and lipid droplets in the liver, increased intestinal villus length, decreased hepatic TG level, elevated levels of HDL3, ABCA1, and apoA-I in the ileum, weakened co-localization of CD86 and TLR4 in the liver, and down-regulated mRNA levels of LBP, NF-κB, IκBα, IL-6, TNF-α, and IL-1β and protein levels of LBP, p-NF-κB, p-IκBα, IL-6, TNF-α, and IL-1β (P<0.05). Compared with the Abcal^fl/fl+HFD group, the Abcal^△Vill+HFD group showed raised blood lipid levels, increased vacuoles and lipid droplets in the liver, elevated hepatic TG level, enhanced co-localization of CD86 and TLR4 in the liver, and up-regulated mRNA levels of LBP, NF-κB, IκBα, IL-6, TNF-α, and IL-1β and protein levels of LBP, p-NF-κB, p-IκBα, TNF-α, and IL-1β (P<0.05). Compared with the Abcal^fl/fl+HFD+M-XS group, the Abcal^△Vill+HFD+M-XS group showed raised blood lipid levels, increased vacuoles and lipid droplets in the liver, elevated hepatic TG level, enhanced co-localization of CD86 and TLR4 in the liver, and up-regulated mRNA levels of LBP, NF-κB, IκBα, IL-6, TNF-α, and IL-1β and protein levels of LBP, p-NF-κB, p-IκBα, IL-6, TNF-α, and IL-1β (P<0.05). In conclusion, modified Xiangsha Liujunzi Decoction ameliorates hepatic inflammation and corrects dyslipidemia by modulating intestinal HDL3 levels.