Objective Explore Zishenhuoxuefang invigorate the circulation of the 156 cases of diabetic nephropathy stage III qi and Yin deficiency and blood stasis of blood rheology in patients with clinical observation. Methods The traditional Chinese Medicine Hospital of Liuzhou city in 2010 March to 2013 year in April 156 cases of diabetic nephropathy stage III patients were randomly divided into treatment group and control group 78 cases. Both groups were given conventional treatment diet and diabetes. Traditional Chinese medicine treatment group were treated with Zishenhuoxuefang treatment， control group with benazepril tablet treatment， treatment for 12 weeks. Results Treatment group indices of blood， urine protein excretion rate， blood glucose and clinical symptoms decreased significantly compared with before treatment（P<0.05 or P<0.01）；compared with the control group the indices of blood， urine albumin excretion rate（UAER）， blood glucose， blood lipids and clinical symptoms improved significantly better than the control group（P<0.01 or P<0.05）. Conclusion Zishenhuoxuefang can improve the blood rheology in patients with stage III of diabetic nephropathy， blood lipid and microcirculation， decrease the excretion of urinary albumin， reduce renal damage， improve renal function.