To observe the therapeutic effects of replenishing qi and nourishing yin, activating blood and dredging collaterals on the treatment of early diabetic nephropathy (DN). Methods: A total of 58 DN patients conforming to the diagnostic criteria were randomly divided into the treatment group (29 patients) and control group (29 patients). Besides the routine therapy including controlling diet，lowing blood glucose and orally taking fosinopril, 10 mg daily, the treatment group was given Chinese medicine of replenishing qi and nourishing yin，activating blood and dredging collaterals for 12 weeks. The changes in UAER, curative effect of renal function, TCM syndrome score and Ccr were observed in the patients. Results: Curative effect of renal function comparison, the total effective rate of the treatment group was 82.76% and that of control group was 62.07%. Syndromes curative effect comparison, the total effective rate of the treatment group was 86.21% and that of control group was 58.62%. The effect of treatment group was better than the control group in lowing UAER and improving Chinese medicine Syndromes, the difference was significant（P<0.05）. There were no obvious side effects found during the treatment. Conclusion: The method of replenishing qi and nourishing yin, activating blood and dredging collaterals showed better therapeutic efficacy in the treatment of early DN.