Abstract: Background Forest-medicinal plant intercropping is an important model for developing the forest-understory economy and controlling soil erosion. Systematically investigating the effects of light availability and soil moisture on the growth traits and photosynthetic physiological characteristics of forest-understory medicinal plants holds significant ecological and economic implications for selecting suitable medicinal species and establishing adaptable intercropping systems. Method A pot-based controlled indoor experiment was conducted using an orthogonal design with three factors (plant species, shading level, soil moisture) each at five levels. The effects of different light intensities (shading levels: 0%, 10%-20%, 30%-40%, 50%-60%, 70%-80%) and soil moisture conditions (substrate moisture maintained at 100%-105%, 80%-85%, 60%-65%, 40%-45%, and 20%-25% of field capacity) on the growth and photosynthetic physiological characteristics of five medicinal plants, i.e. Turpinia arguta (Lindl.) Seem., Chimonanthus nitens Oliv, Ilex asprella (Hook. & Arn.) Champ. Ex Benth., Daphne genkwa Siebold & Zucc. and Lygodium japonicum (Thunb.) Sw. under a forest system were investigated. Results1) Under full sunlight (0% shading), the biomass accumulation (shoot, root, and total) of all test medicinal plants reached the highest levels. With increasing shading, the biomass accumulation first decreased (at 10%-20% shading) and then increased (at 30%-40% shading). Under moderate shading (30%-40%), canopy projection area, leaf area, and SPAD values of all five species peaked. 2) Canopy projection area and leaf area of the five plants decreased initially and then increased with rising soil moisture. In contrast, shoot, root, and total biomass accumulation all increased overall with higher moisture levels. When soil moisture exceeded 60% of field capacity, optimal balances were achieved among stomatal conductance (Gs), transpiration rate (Tr), and net photosynthetic rate (Pn). Chimonanthus nitens Oliv and Ilex asprella (Hook & Am) Champ ex Benth exhibited higher total biomass accumulation (22.19-23.50 g) than other tested species (P < 0.05). Their root-to-shoot ratios (0.39-0.48) were low, indicating preferential carbon allocation to aboveground tissues. This trait enhances erosion resistance under heavy canopy rainfall and improves photosynthetic efficiency in low-light environments. Conclusions Chimonanthus nitens Oliv and Ilex asprella (Hook & Am) Champ ex Benth are recommended as priority medicinal species for understory cultivation in southern red soil regions. Optimal microenvironments for these species include 30%-40% shading and soil moisture levels above 60% of field capacity.