OBJECTIVE To investigate clinical efficacy and safety of Jipei dilong ointment combined with diacerein in the treatment of knee osteoarthritis （KOA） in the early and mid-term stage. METHODS Totally 100 KOA patients were randomly divided into control group and trial group， with 50 cases in each group. Control group received Diacerein capsules orally， 50 mg every time， bid. Trial group additionally received Jipei dilong ointment， once a day， on the basis of control group. Both groups had a treatment course of 4 weeks， and were followed up for 3 months after treatment. The clinical efficacy of 2 groups， visual analogue scale （VAS）， Western Ontario and McMaster University osteoarthritis index （WOMAC） score， Lysholm scores before and after treatment， at 3-month follow-up after treatment were all observed； the levels of tumor necrosis factor-α （TNF-α）， interleukin 1β （IL-1β）， IL-6， superoxide dismutase （SOD）， malondialdehyde （MDA）， nitric oxide （NO）， cartilage oligomeric matrix protein （COMP）， matrix metalloproteinase-13 （MMP-13） and C-telopeptide of type Ⅱ collagen （CTX-Ⅱ） were detected in knee joint fluid. The incidence of adverse drug reactions was recorded. RESULTS After 4 weeks of treatment， total effective rate was 96.0% in trial group and 90.0% in control group， without statistical significance between 2 groups （P＞0.05）. At 3- 2019YFC1712500） month follow-up after treatment， total effective rate of trial group was 94.0%， and was higher than 62.0% of control group（P＜0.05）. After 4 weeks of treatment and at 3-month follow-up after treatment， VAS score， WOMAC score，the contents ofTNF-α， IL-1β， IL-6， MDA， NO， COMP， MMP-13 and CTX-Ⅱ in knee joint fluid of two groups were significantly lower than before； Lysholm score and SOD activity of knee joint fluid were significantly higher than before， and the trial group was significantly better than the control group during the same period （P＜0.05）. And there was no statistical significance in the incidence of adverse drug reactions between two groups（P＞0.05）. CONCLUSION For the treatment of KOA in early and mid- term stage， Jipei dilong ointment combined with diacerein relieve pain， improve knee function by inhibiting inflammatory reaction， reducing oxidative stress and inhibiting chondrocyte and matrix degradation， and have low incidence of adverse drug reactions.