Background: Pediatric diarrhea is one of the most common diseases among children and is the second leading cause of death and the third most prevalent disease among children worldwide. In Traditional Medicine, pediatric diarrhea is considered to result from an imbalance of the three bodily principles. In the treatment of this condition, Indra-4 decoction, which is traditionally used for its antipyretic and antidiarrheal effects, is commonly administered. Aim: To evaluate the clinical efficacy of Indra-4 in the treatment of pediatric diarrhea. Materials and Methods: A quantitative, randomized, controlled (active-control), open-label, single-center clinical trial was conducted. A total of 150 children were enrolled based on a confidence level of P>0.90 and a margin of error of D=10%, and were randomly assigned to two groups in a 1:1 ratio. The treatment group received Indra-4 decoction at a dose of 1.5 g twice daily for children aged 2–5 years and 2 g twice daily for children aged 6–9 years. The comparison group received montmorillonite powder at a dose of 2 g three times daily. Treatment was administered for 7 days in both groups. Clinical symptoms were scored and assessed before treatment, on days 3 and 5 of treatment, and after completion of treatment, and the results were compared between the two groups. The study was conducted with the approval of the Research Ethics Review Committee of the Mongolian National University of Medical Sciences, Mongolia (Approval No. 2026/1-01, January 23, 2026). Result: No statistically significant differences were observed between the two groups in terms of age, sex distribution, or total symptom scores at baseline (p>0.05), indicating that the groups were comparable. On days 3 and 5 of treatment and after treatment, the total symptom scores in the Indra-4 group were significantly lower than those in the comparison group (p<0.001). The overall treatment efficacy was 92.0% in the Indra-4 group and 78.7% in the comparison group, with a statistically significant difference (χ²=4.315, p=0.038). The percentage reduction in symptom scores was 90.97±4.14% in the Indra-4 group compared with 61.32±5.24% in the comparison group (t=28.072, p<0.001). These findings suggest that Indra-4 decoction may be more effective in reducing symptoms and improving treatment outcomes in children with diarrhea. Conclusion The results demonstrated that the Indra-4 group had significantly greater improvement in the major and accompanying symptoms of pediatric diarrhea, as well as higher overall treatment efficacy and recovery rates, compared with the comparison group. Indra-4 appears to be effective in the treatment of pediatric diarrhea and may be suitable for clinical use.