Diabetic nephropathy（DN） is a common and severe microvascular complication of diabetes. In recent years， the classical herbal formula Shenqi dihuang decoction has demonstrated unique advantages in the clinical treatment of DN. This article conducts a systematic review of the mechanisms of action and clinical applications of Shenqi dihuang decoction in the treatment of DN. It reveals that the mechanism by which this formula improves DN involves multi-target synergistic regulation. For instance, Shenqi dihuang decoction exerts multiple pharmacological effects by regulating signaling pathways including phosphatidy linostiol 3-kinase/protein kinase B， AMP-activated protein kinase/silent information regulator 1/forkhead box O1， and nuclear factor erythroid 2-related factor 2/heme oxygenase-1 pathways.These effects include regulating glucose and lipid metabolism， inhibiting oxidative stress， reducing inflammation， improving insulin resistance， modulating cell death （apoptosis/autophagy/ferroptosis/pyroptosis）， and preventing renal fibrosis. Existing clinical studies indicate that Shenqi dihuang decoction and its modified formulas， alone or in combination with other therapeutic methods， can significantly improve glucose and lipid metabolism， reduce proteinuria， and delay renal function decline in patients with DN. These effects are superior to those of Western medicines such as irbesartan， valsartan， and empagliflozin， and the treatment demonstrates good safety. Future research should leverage systems biology and artificial intelligence technologies to further elucidate the integrated mechanisms in the treatment of DN by Shenqi dihuang decoction， thereby advancing the precision and standardization of its clinical application.