Traditional Chinese medicine (TCM) is an interesting research topic in China’s thousands of years of history. With the recent advances in artificial intelligence technology, some researchers have started to focus on learning the TCM prescriptions in a data-driven manner. This involves appropriately recommending a set of herbs based on patients’ symptoms. Most existing herb recommendation models disregard TCM domain knowledge, for example, the interactions between symptoms and herbs and the TCM-informed observations (i.e., TCM formulation of prescriptions). In this paper, we propose a knowledge-guided and TCM-informed approach for herb recommendation. The knowledge used includes path interactions and co-occurrence relationships among symptoms and herbs from a knowledge graph generated from TCM literature and prescriptions. The aforementioned knowledge is used to obtain the discriminative feature vectors of symptoms and herbs via a graph attention network. To increase the ability of herb prediction for the given symptoms, we introduce TCM-informed observations in the prediction layer. We apply our proposed model on a TCM prescription dataset, demonstrating significant improvements over state-of-the-art herb recommendation methods.