A new approach to conceptual design based on path decomposition of digraph is presented in the paper. The set of basic mechanisms is firstly defined and every single mechanism is taken as a basic element in the set. The relationships among basic elements are described with paths or loops in the graph theory. Therefore, the conceptual design can be visualized as searching a suitable loop in the set of basic mechanisms. The digraph and the path decomposition in the graph theory are applied to represent solutions of conceptual design, such as the sequence, existence and the concatenation formation and repetition. And then, an illation formula is derived and a construction tree of conceptual design process is provided. The generated schemes are further filtered using character restriction operation which followed corresponding rules, so as to identify feasible solutions. Finally, a design example is given to demonstrate the effectiveness of the proposed approach.