Objective To study the clinical cruative effects of modified Fuzi Lizhong decotion in treating of chronic atrophic gastritis with IM with Spleen-Stomach Deficiency-cold type and its mechanism. Methods 116cases of patients with IM were randomly divided into two groups， control group and study group with 58 cases in each group. The control group used folic acid tablets（5mg/time， 3times/day）， Weifuchun（1.436g/time， 3times/day）. The study group orally modified Fuzi Lizhong decotion， 2times/day， continuous treatment for 6 months. After treatment， the lesions of gastric mucosa underwent the pieketage biopsy， using a visual analogue score on the gastric mucosal pathological specimens with IM， the expression of Shh in the specimens was detected by immunohistochemical method， compared with the differences of IM and Shh in the specimens. Results In the control group after treatment， the gastric mucosal IM was significantly lower than that before treatment（P<0.05）， while the expression of Shh was significantly higher than that before treatment（P<0.05）. In the study group after treatment， the gastric mucosal IM was significantly lower than that before treatment（P<0.005）， while the expression of Shh was significantly higher than that before treatment（P<0.005）. There weren’t significantly differeces of the gastric mucosal IM and the expression of Shh between the two groups after treatment（P>0.05）. Conclusion Modified Fuzi Lizhong decotion can reverse intestinal metaplasia in certain degree， the mechanism may be related to the regulation of Shh expression in gastric mucosal lesions.