Abstract：Objective：To observe the clinical effect of Xiaokeping tang for wasting-thirst of yin deficiency，dryness-heat with stasis type. Methods：A total of 800 cases of patients with wasting-thirst of yin deficiency，dryness-heat with stasis type were selected and randomly divided into the control group and the study group，400 cases in each group. The control group was treated metformin， and the study group was treated with Xiaokeping tang. Both groups were treated for one month. Levels of urinary albumin excretion rate(UAER) ， fasting blood glucose(FBG) ， 2-hour postprandial blood glucose (P2hBG) and hemoglobin A1c(HbA1c) before and after treatment，as well as clinical effects were observed and compared in the two groups. Results： The total effective rate was 94.50% in the study group and 70.50% in the control group， the difference being significant(P＜0.05). Before treatment，there was no significant difference being found in levels of UAER， FBG，P2hBG and HbA1c between the two groups(P＞0.05). After treatment，the levels of UAER，FBG，P2hBG and HbA1c in the two groups were decreased when compared with those before treatment(P＜0.05)；the improvement of the indexes above in the study group was more significant than that in the control group(P＜0.05). Conclusion： Xiaokeping tang has a defined curative effect in the treatment of wasting- thirst of yin deficiency，dryness- heat with stasis type. It can enhance UAER，decrease levels of blood glucose and HbA1c，whose curative effect is better than that of metformin.