Objective： To observe the clinical effect of the therapy of Shugan Liqi Huoxue Decoction combined with routine western medicine on chronic atrophic gastritis (CAG) of liver- stomach disharmony type. Methods：A total of 80 CAG patients of liver-stomach disharmony type were selected and divided into the observation group and the control group according to the random number table method，with 40 cases in each group. The control group was treated with Mosapride Citrate Tablets and Rebamipide Tablets，and the observation group was additionally given Shugan Liqi Huoxue Decoction for treatment. The clinical effects in the two groups were evaluated； the traditional Chinese medicine (TCM) syndrome scores and scores of pathology examination were compared before and after treatment between the two groups；the incidence of adverse reactions was counted. Results： The total effective rate was 85.00% in the observation group， higher than that of 70.00% in the control group (P＜0.05). After treatment， the TCM syndrome scores in the two groups were decreased when compared with those before treatment (P＜ 0.05)，and the TCM syndrome score in the observation group was lower than that in the control group (P＜ 0.05). After treatment，the scores of gastric mucosa atrophy，intestinal metaplasia and dysplasia in the two groups were decreased when compared with those before treatment (P＜0.05)，and the above scores in the observation group were lower than those in the control group (P＜0.05). The incidence of adverse reactions in the observation group was lower than that in the control group (P＜0.05). Conclusion： The therapy of Shugan Liqi Huoxue Decoction combined with routine western medicine can improve the clinical symptoms of CAG patients， and has certain curative effects on the mitigation or reversion of gastric mucosa atrophy，intestinal metaplasia and dysplasia with less adverse reactions.