Chinese dragon’s blood, the red resin of Dracaena cochinchinensis, one of the renowned traditional medicines, has been used to facilitate blood circulation and disperse blood stasis for thousands of years. Phenolic compounds are considered to be responsible for its main biological activities. In this study, total phenolic compounds of Chinese dragon’s blood were made into capsule (Longxuetongluo Capsule, LTC) and their effects on the abnormal hemorheological properties were examined by high fat diet (HFD) induced ApoE−/− mice. Compared to the model group, LTC recovered the abnormal hemorheological parameters in HFD-induced ApoE−/− mice by reducing whole blood viscosity (WBV) at high rate and improving erythrocyte function. In conclusion, LTC could ameliorate erythrocyte deformability and osmotic fragility through the reduction of lipid peroxidation on plasma and erythrocyte membranes in HFD-induced ApoE−/− mice, which supported the traditional uses of Chinese dragon’s blood as an effective agent for improving blood microcirculation in hypercholesterolemia.