This paper reviewed the research progress on the pharmacological effects and clinical application of Xiaoxuming decoction. Pharmacological studies have found that Xiaoxuming decoction has the functions of protecting nerve cells, neurovascular units and mitochondrial function, reducing cerebral edema and preventing cerebrovascular diseases. Clinically, it can improve nerve injury after cerebral ischemia stroke, and is commonly used in the treatment of stroke, Guillain Barre syndrome, Alzheimer’s disease, rheumatoid arthritis, cervical spondylosis, and peripheral neuropathy, etc.