ABSTRACT: Medicinal plants are the primary material basis for disease prevention and treatment in traditional Chinese medicine (TCM). The conservation and sustainable utilization of these medicinal plants is critical for the development of the TCM industry. However, wild medicinal plant resources have sharply declined in recent decades. To ameliorate the shortage of medicinal plant resources, it is essential to explore the development potential of the TCM industry in different geographical regions. For this purpose, we examined the spatial distribution of commonly used medicinal plants in China, the number of Chinese medicinal material markets, and the number of TCM decoction piece enterprises. Specifically, multispecies superimposition analysis and Thiessen polygons were used to reveal the optimal range for planting bulk medicinal plants and the ideal regions for building Chinese medicinal material markets, respectively. Furthermore, we quantitatively analyzed mismatches between the spatial distribution of commonly used medicinal plant richness, Chinese medicinal material markets, and TCM decoction piece enterprises. We found that the areas suitable for growing commonly used medicinal plants in China were mainly distributed in Hengduan Mountain, Nanling Mountain, Wuling Mountain, and Daba Mountain areas. The Thiessen polygon network based on Chinese medicinal material market localities showed there are currently fewer markets in southwestern, northwestern, and northeastern China than in central and southern China. TCM decoction piece enterprises are concentrated in a few provinces, such as Hebei and Jiangxi. We found that the distribution of commonly used medicinal plants, Chinese medicinal material markets and TCM decoction piece enterprises are mismatched in Henan, Shaanxi, Hunan, Hubei, Zhejiang, Fujian, Chongqing, and Xizang. We recommend strengthening development of the TCM industry in Henan, Hunan, Zhejiang, Shaanxi, Hubei, Chongqing, Fujian, and Xizang; building more Chinese medicinal material markets in southwestern, northwestern, and northeastern China; and establishing medicinal plant nurseries in resource-rich provinces to better protect and domesticate local medicinal plants.