Abstract：Objective：To observe the clinical effect of Erhe Decoction assisting conventional treatment of western medicine on diabetic peripheral neuropathy (DPN). Methods： A total of 88 DPN patients with syndrome of phlegm-blood stasis obstructing the collaterals were divided into treatment group and control group according to the random number table method，with 44 cases in each group. During the treatment， one case was excluded from the treatment group and two cases from the control group. The control group was given conventional treatment of western medicine such as medicines for reducing blood glucose and lowering lipid， and intravenous injection of Mecobalamin Injection， and the treatment group was treated with Erhe Decoction based on the treatment of the control group. After three months of treatment， the clinical effects， traditional Chinese medicine (TCM) syndrome scores， levels of blood glucose [fasting blood glucose (FBG) and 2-hour postprandial blood glucose (P2hBG)]，peripheral nerve conduction velocity [sensory nerve conduction velocity (SNCV) and motor nerve conduction velocity (MNCV)] and levels of serum inflammatory factors [C-reactive protein (CRP) and interleukin-6 (IL-6)] in the two groups were evaluated. Results：The total effective rate was 97.67% in the treatment group and 80.95% in the control group，the difference being significant (P＜0.05). After treatment，the TCM syndrome scores in the two groups were reduced when compared with those before treatment (P＜0.05)， and the above scores in the treatment group were lower than those in the control group (P＜0.05). After treatment，the levels of FBG and P2hBG in the two groups were down-regulated when compared with those before treatment (P＜0.05))，and the above two levels in the treatment group were lower than those in the control group (P＜0.05). After treatment， the SNCV and MNCV of median nerve and common peroneal nerve in the two groups were elevated when compared with those before treatment (P＜0.05)， and the above two indexes in the treatment group were higher than those in the control group (P＜0.05). After treatment，the levels of CRP and IL-6 in the two groups were dwindled when compared with those before treatment (P＜0.05)，and the above two levels in the treatment group were lower than those in the control group (P＜0.05). Conclusion： The therapy of Erhe Decoction assisting conventional treatment of western medicine has a definite curative effect on DPN with syndrome of phlegm-blood stasis obstructing the collaterals， which can improve the TCM syndromes of patients，reduce the inflammatory responses of the body and the blood glucose levels， and improve the peripheral nerve conduction velocity.