Objective:To observe the clinical efficacy and therapeutic mechanisms of “Quyu Qingbi Decoction” and arthroscopic operation in the treatment of knee osteoarthritis  Methods:Eighty-seven subjects were randomized into observation group(n=43) and control group(n=44); all the patients were treated with arthroscopic operation and intra-articular injection of sodium hyaluronate, with a course of six weeks. The clinical efficacy, knee function and pain scores were evaluated, and the levels of such inflammatory factors in knee fluid as TNF-α, IL-1β, MMP-3 and MMP-13 were detected  Results:①The total effective rate was 90.7% in the observation group and 72.7% in the control group, with better efficacy in the observation group than in the control group(P<0.05). ②After treatment, the knee functional scores were increased and the pain scores were reduced in both groups(P<0.05), with significant differences in the knee functional score and the pain score between the two groups(P<0.05). ③After treatment, the levels of TNF-α, IL-1β, MMP-3 and MMP-13 were reduced in both groups(P<0.05), with more significant reduction in the observation group than in the control group(P<0.05)  Conclusion:“Quyu Qingbi Decoction” can regulate the inflammatory agents in knee osteoarthritis patients undergoing arthroscopic operation to improve knee functions.