Objective To observe the clinical effect of Xiaoke Tongluo Decoction combined with Chinese herbal fumigation and washing on type 2 diabetic foot. Methods A total of 90 patients with type 2 diabetes admitted to Gaomi Traditional Medicine Hospital from July to August 2020 were randomly divided into the treatment group and the control group, with 45 cases in each group. The treatment group was given Xiaoke Tongluo Decoction combined with Chinese medicine fumigation, the control group was given Mecobalamin and Epalrestat orally for 1 month. The curative effect of Xiaoke Tongluo Decoction combined with traditional Chinese medicine (TCM) fumigation was evaluated by statistical analysis of common peroneal nerve conduction velocity and TCM symptom integral in two groups. Results After treatment, the conduction velocity of common peroneal nerve and the score of clinical symptoms in treatment group were higher than those in control group, the total effective rate of the treatment group was higher than that of the control group, the differences were stastically significance (P＜0.05). Conclusion Xiaoke Tongluo Decoction combined with Chinese medicine fumigation and washing can effectively improve the nerve transfer velocity and clinical symptoms of lower limbs in patients with type 2 diabetic foot.