To observe the clinical effect of Yiqi Yangyin Huoxue Method on type 2 diabetes. Methods: Seventy patients with type 2 diabetes were randomly divided into treatment group (37 cases) and control group (33 cases). Control group received diabetes education, diet control, exercise and metformin treatment. Except the same therapy as control group, treatment group was treated with herbs in Yiqi Yangyin Huoxue Method, which has the function of reinforcing qi, nourishing yin and promoting circulation. The following items were compared before and after the therapy: blood glucose (FBG), 2 h postprandial blood glucose (2 hPG), glycosylated hemoglobin (HbA1c), fasting insulin (FINS), blood lipid, blood coagulation function and insulin sensitivity index (ISI), body mass index (BMI) and TCM syndrome integral. Results: After 16-weeks treatment, the fasting blood glucose (FBG), 2 h postprandial blood glucose (2 hPG) and glycosylated hemoglobin (HbA1c) decreased in both two groups effectively. Moreover, it worked better in improving fasting insulin (FINS), insulin sensitivity index (ISI), prothrombin time (PT), activated partial thromboplastin time (APTT), cholesterol (TC), triglyceride (TG), fibrinogen (FIB) and TCM syndrome integral in treatment group. The difference between the two groups was significant (P<0.05 or P<0.001). Curative effect of the treatment group was significantly higher than that of the control group (P<0.05 or P<0.001). On the other hand, fasting insulin (FINS) and insulin sensitivity index (ISI) in control group did not show obvious changes. Conclusion: Herbs in Yiqi Yangyin Huoxue method can significantly reduce blood lipid, blood glucose and glycosylated hemoglobin (HbA1c), improve blood hypercoagulable state, and reduce insulin resistance and TCM syndrome integral.