Abstract： Objective： To observe the clinical effect of ZHANG's moxibustion method of dissipating blood stasis to free the collateral vessels with fumigation medicated rolls combined with external application of Baicaoshang Adhesive Plaster on knee osteoarthritis(KOA) complicated with bone marrow edema(BME). Methods： A total of 90 patients with KOA of cold- damp obstruction type complicated with BME were prospectively selected and divided into the observation group and the control group according to the random number table method， with 45 cases in each group. The control group was given Glucosamine Hydrochloride Capsules orally，and the observation group was treated with ZHANG's moxibustion method of dissipating blood stasis to free the collateral vessels with fumigation medicated rolls combined with external application of Baicaoshang Adhesive Plaster. Both groups were treated for 3 courses， 4 weeks being a course. Before and after treatment，the scores of traditional Chinese medicine(TCM) syndromes， Visual Analogue Scale(VAS) of knee joint pain， Lysholm knee joint， and BME were evaluated， and the clinical effects were compared between the two groups. Results： After three courses of treatment， the total clinical effective rate was 95.56% in the observation group and 80.00% in the control group， the difference being significant(P＜0.05). The scores of TCM syndromes， VAS， and BME in the two groups were decreased when compared with those before treatment，and the scores of Lysholm knee joint were increased，differences being significant(P＜0.05)；the scores of traditional Chinese medicine syndromes， VAS， and BME in the observation group were lower than those in the control group， and the score of Lysholm knee was higher than that in the control group， differences being significant(P＜0.05). Conclusion： ZHANG's moxibustion method of dissipating blood stasis to free the collateral vessels with fumigation medicated rolls combined with external application of Baicaoshang Adhesive Plaster can significantly relieve the knee joint pain in patients with KOA of cold- damp obstruction syndrome type complicated with BME， improve the symptoms， promote the absorption of knee joint edema， and enhance the knee joint function.