Coronavirus disease (COVID-19) is a new infectious disease associated with high mortality, and traditional Chinese medicine decoctions (TCMDs) have been widely used for the treatment of patients with COVID-19 in China; however, the impact of these decoctions on severe and critical COVID-19-related mortality has not been evaluated. Therefore, we aimed to address this gap. In this retrospective cohort study, we included inpatients-diagnosed with severe/critical COVID-19 at the Tongren Hospital of Wuhan University and grouped them depending on the recipience of TCMDs (TCMD and non-TCMD groups). We conducted a propensity score-matched analysis to adjust the imbalanced variables and treatments and used logistic regression methods to explore the risk factors associated with in-hospital death. Among 282 patients with COVID-19 who were discharged or died, 186 patients (66.0%) received TCMD treatment (TCMD cohort) and 96 (34.0%) did not (non-TCMD cohort). After propensity score matching at a 1:1 ratio, 94 TCMD users were matched to 94 non-users, and there were no significant differences in baseline clinical variables between the two groups of patients. The all-cause mortality was significantly lower in the TCMD group than in the non-TCMD group, and this trend remained valid even after matching (21.3% [20/94] vs. 39.4% [37/94]). Multivariable logistic regression model showed that disease severity (odds ratio: 0.010; 95% CI: 0.003, 0.037; P < 0.001) was associated with increased odds of death and that TCMD treatment significantly decreased the odds of in-hospital death (odds ratio: 0.115; 95% CI: 0.035, 0.383; P < 0.001), which was related to the duration of TCMD treatment. Our findings show that TCMD treatment may reduce the mortality in patients with severe/critical COVID-19.