Objective:To observe the clinical efficacy of “Yiqi Yangyin Huoxue Qufeng Therapy” in the treatment of diabetic nephropathy in stage Ⅲwith qi-yin deficiency and blood-stasis. MethodsSixty subjects were randomized into two groups (30 cases in each group).All were received conventional modalities and controlled the blood lipid and glucose. The treatment group was given “Yiqi Yangyin Huoxue Qufeng”decoction and the control group was given losartan, with a course of 12 weeks. The clinical efficacy, syndrome score of Traditional Chinese Medicine(TCM), urinary albumin within 24 hours, urine ACR, Cysc, GFR, FPG, HbA1C, TC, TG and TNF-α were observed and compared.  Results:①The total effective rate was 86.67% in the treatment group and 53.33% in the control group, and the efficacy in the treatment group was better than that in the control group(P<0.05);②After treatment, the syndrome score of TCM in the treatment group significantly decreased compared with before treatment(P<0.01), and was lower than that in the control group(P<0.01);③After treatment, the levels of Cysc, urine ACR and urine albumin within 24 h all decreased in both groups compared with before treatment(P<0.05,P<0.01), and those in the treatment group were lower than those in the control group(P<0.05, P<0.01);④After treatment, the levels of FPG, HbA1c, TC, TG and TNF-α in the treatment group decreased compared with before treatment(P<0.05, P<0.01), and was lower than those in the control group(P<0.05,P<0.01).  Conclusion:“Yiqi Yangyin Huoxue Qufeng Therapy”can reduce the level of the urine protein and TNF-α, and improve the metabolism of glucose and lipid in the patients with diabetic nephropathy in stage Ⅲ.