Abstract: Metaphor is a subject which has attracted wide attention. This paper discusses the semiotic nature, cognitive features and understanding process of metaphor from a Peircean semiotic perspective. It shows that metaphor is a hypoicon that describes a parallelism in something else, with comparatively low degree of iconicity. As a common language phenomenon, it has such cognitive features as similarity, interactivity and multimodality. The understanding of metaphor is realized on the base of subjective interpretation, with a new interpretant created through the interaction between the interpretants of the vehicle and the tenor. Result indicates that Peircean semiotic theory is of great significance in the construction of a cognitive-semantic theory of metaphor.