Jaboyangyeong-hwan (IAE) has been known as a traditional medicine for the treatment of debility, fatigue, and liver diseases. The hepatoprotective effect of the water extract of Jaboyangyeong-hwan was investigated against carbon tetrachloride ($CCl_4$)-induced hepatic damage. A single intraperitoneal injection of $CCl_4$produced liver damage in rats as manifested by the significant rise of aspartate aminotransferase (AST, alanine aminotransferase (ALT), and alkaline phosphatase (ALP) in serum as compared to those of untreated normal group. Pretreatments of rats with the JAE extract (300, 600, and 1200 mg/kg for 7 days) were significantly reduced AST, ALT, and ALP levels compared with $CCl_4$-treated control group. Treatment of rats with $CCl_4$led to significantly increase in lipid peroxidation and significantly decrease in cytochrome P450 and P450 reductase. The oral administration of the JAE extract significantly inhibited the accumulation of microsomal thiobarbituric acid reactive substance (TBARS) and increased the cytochrome P450 and P450 reductase activity. All these biochemical alterations resulting from $CCl_4$administration were inhibited by the pretreatment with JAE extract. These results suggest that JAE water extract can be useful as a hepatoprotective agent.