Abstract： Objective： To observe the clinical effect of Modified Huangqin Decoction assisting transarterial chemoembolization (TACE) on hepatocellular carcinoma and its effect on the liver function. Methods： A total of 80 patients with hepatocellular carcinoma were divided into the control group and the observation group according to the random number table method，with 30 cases in each group. The control group was given TACE for treatment， and the observation group was additionally treated with Modified Huangqin Decoction based on the treatment of the control group. The clinical effects，incidence of adverse reactions were compared after treatment between the two groups. The levels of cell factors， index of immune function and liver function were compared before and after treatment between the two groups. Results：After treatment，the total effective rate was 63.33% in the observation group，higher than that of 36.67% in the control group (P＜0.05). After treatment， levels of serum hypoxia inducible factor-1α (HIF-1α)，vascular endothelial growth factor (VEGF)，nuclear transcription factor-κB (NF-κB) in both groups were decreased (P＜0.05)， and the above three levels in the observation group were lower than those in the control group (P＜0.05). After treatment，the levels of CD3+ and CD4+ in the observation group were increased (P＜0.05)，and the CD8+ level was decreased (P＜0.05)；the levels of CD3+ and CD4+ in the observation group were higher than those in the control group (P＜0.05)， and the CD8 + level was lower than that in the control group (P＜0.05). After treatment，levels of aspartate aminotransferase (AST)， alanine aminotransferase (ALT) and total bilirubin (TBil) in both groups were deceased (P＜0.05)， and the above three levels in the observation group were lower than those in the control group (P＜0.05). Conclusion：Modified Huangqin Decoction assisting TACE has a significant curative effect on hepatocellular carcinoma， which has a positive effect on the improvement of inflammatory responses， the immune function and liver function with good safety.