Background: Naohuan Dan is a prescription used to treat dementia. This study aims to assess the effectiveness and safety of Naohuan Dan combined with idebenone in treating mild cognitive impairment (MCI) with kidney deficiency and phlegm stasis. Materials and methods: This retrospective, observational clinical trial enrolled 64 MCI patients treated in the Sun Yat-sen Memorial Hospital, Zhongshan University, from May 1, 2019, to April 30, 2022. The 32 patients in the treatment group received Naohuan Dan combined with idebenone, whereas the 32 patients in the control group were treated with idebenone alone. The observation lasted for 12 weeks. The primary outcomes were the Mini-Mental State Examination (MMSE) score and clinical efficacy, whereas secondary outcomes included the Montreal Cognitive Assessment (MCS) score, the activities of daily living (ADL) score, the Geriatric Depression Scale (GDS) score, the traditional Chinese medicine (TCM) syndrome score, and changes in serum markers. Neuron-specific enolase (NSE), interleukin 8 (IL-8), and tumor necrosis factor α (TNF-α) were taken as the serological indicators for evaluating cognitive function. Adverse events in both groups were recorded during the treatment period. Results: The treatment group demonstrated higher MMSE scores and clinical efficacy than the control group, specifically in the scores of spatial orientation, attention and calculation, and language proficiency in the MMSE scale. The treatment group outperformed the control group in MCS, ADLs, GDS, and TCM syndrome scores. Furthermore, the treatment group was superior to the control group in recovering the levels of NSE, IL-8, and TNF-α. In addition, the treatment group had lower incidence of adverse reactions such as nausea and poor appetite than the control group. Conclusions: The 12-week treatment with Naohuan Dan combined with idebenone significantly improved the cognitive function and daily life abilities, lowered the depression levels, and reduced the occurrence of adverse events among patients with MCI. These findings offer valuable insights into the efficacy of integrating TCM with Western medicine in the clinical management of MCI. (ClinicalTrials.gov ID: NCT05931029; https://clinicaltrials.gov/study/NCT05931029?cond=Naohuan%20Dan&rank=1)