Objective To evaluate the therapeutic effect of minimally invasive retractor reduction and fixation through sinus tarsi approach together with external application of Chinese medicine for displaced intra-articular calcaneal fractures. Methods From October of 2009 to June of 2013, 52 patients with displaced intra-articular calcaneal fractures (Sanders type Ⅱ, Ⅲ) were enrolled into the study. The patients received minimally invasive retractor reduction through sinus tarsi approach and fixation with small plate and cannulated screws, and after the operation were given external washing with Chinese herbal formula Shenxing Fang ( mainly composed of Herba Lycopodii, Herba Speranskiae Tuberculatae, Rhizoma Sparganii, Rhizoma Curcumae, Herba Asari, Radix Aconiti Preparata, Radix Aconiti Kusnezoffii Preparat). Follow-up was carried out for the evaluation of the therapeutic effect of displaced intra-articular calcaneal fractures ( Sanders type Ⅱ, Ⅲ). Results Forty cases (involving 44 feet) received the postoperative follow-up for 12-18 months (average being 14.2 months). The Maryland foot scores were 95 points for type Ⅱ displaced intra-articular calcaneal fractures, and 86 points for type Ⅲ fractures. Satisfactory results were achieved in the height, width and length of the calcaneus as well as the B?hler's and Gissane angle ( P<0.01). Conclusion Minimally invasive retracter reduction and fixation through sinus tarsi approach together with external application of Chinese medicine exert satisfying effect for the treatment of displaced intra-articular calcaneal fractures.