This article discusses the TCM diagnosis and treatment of functional dyspepsia based on the theory of “stagnation due to deficiency”. It is considered that functional dyspepsia is caused by weakness of the spleen and stomach, with “stagnation due to deficiency” as the main pathogenesis and phlegm-dampness blocking collaterals due to qi stagnation as the turning point of the pathogenesis. Eventually, the result of phlegm-qi stagnation and blood stasis obstructing collaterals leads to persistency of the disease. In clinical practice, doctors should pay close attention to the pathogenesis of “stagnation due to deficiency” and causes of the disease. When treating the disease, doctors should know the principle of treatment and keep in mind the methods such as strengthening the body to dispel pathogenic factors and dispelling pathogenic factors without harming the healthy qi. When prescribing a prescription, doctors should first use Chinese medicines to mildly supplement the spleen and stomach, and apply Chinese medicines to clear away dampness and turbidity, dredge and descend qi and slowly eliminate stasis.