Abstract：Objective：To observe the clinical effect of modified Shengmai San combined with Liuwei Dihuang Decoction in early stage of type 2 diabetes nephropathy of qi-yin deficiency type. Methods：A total of 60 cases of patients in early stage of type 2 diabetes nephropathy of qi-yin deficiency type were selected and divided into the observation group and the control group according to the random number table method， with 30 cases in each group. The control group was treated with conventional western medicine，and the observation group was additionally treated with modified Shengmai San combined with Liuwei Dihuang Decoction based on the treatment of the control group. Clinical effects，Traditional Chinese medicine (TCM) syndrome scores， kidney function indexes levels， and inflammatory factors levels were compared between the two groups before and after treatment. Results：The total effective rate was 93.33% in the observation group，higher than that of 70.00% in the control group (P＜0.05). After treatment，the various TCM syndrome scores in the two groups were decreased when compared with those before treatment (P＜ 0.05)，and the various TCM syndrome scores in the observation group were lower than those in the control group (P＜0.05). After treatment，creatinine clearance rates (CCr) in the two groups were increased when compared with those before treatment (P＜0.05)，and CCr in the observation group was higher than that in the control group (P＜0.05)；urine albumin-creatinine ratio (UACR) in the two groups was decreased when compared with those before treatment (P＜0.05)，and UACR in the observation group was lower than that in the control group (P＜0.05). After treatment， the levels of procalcitonin (PCT) and hypersensitive Creactive protein (hs-CRP) in serum in the two groups were decreased when compared with those before treatment (P＜0.05)，and the levels of PCT and hs-CRP in serum in the observation group were lower than those in the control group (P＜0.05). Conclusion：Modified Shengmai San combined with Liuwei Dihuang Decoction can improve the clinical effects on patients in the early stage of type 2 diabetes nephropathy of qi-yin deficiency type，alleviate the clinical symptoms of patients，improve kidney function，and regulate the inflammatory reactions of the body.