Objective. The purpose of this systematic review is to evaluate the evidence of Yiqi Yangyin Huoxue Method for diabetic nephropathy. Methods. 11 electronic databases, through September 2015, were searched to identify randomized controlled trials of Yiqi Yangyin Huoxue Method for diabetic nephropathy. The quality of the included trials was assessed using the Jadad scale. Results. 26 randomized controlled trials were included in our review. Of all the included trials, most of them were considered as high quality. The aggregated results suggested that Yiqi Yangyin Huoxue Method is beneficial to diabetic nephropathy in bringing down the microalbuminuria (SMD = −0.98, 95% CI −1.22 to −0.74), serum creatinine (SMD = −0.56, 95% CI −0.93 to −0.20), beta-2 microglobulin (MD = 0.06, 95% CI 0.01 to 0.12), fasting plasma glucose (MD = −0.35, 95% CI −0.62 to −0.08), and 2-hour postprandial blood glucose (MD = 1.13, 95% CI 0.07 to 2.20), but not in decreasing blood urea nitrogen (SMD = −0.72, 95% CI −1.47 to 0.02) or 2-hour postprandial blood glucose (SMD = −0.48, 95% CI −1.01 to 0.04). Conclusions. Yiqi Yangyin Huoxue Method should be a valid complementary and alternative therapy in the management of diabetic nephropathy, especially in improving UAER, serum creatinine, fasting blood glucose, and beta-2 microglobulin. However, more studies with long follow-up are warrant to confirm the current findings.