Objective. To explore the clinical application of the classical theory of traditional Chinese medicine (TCM) in diabetic nephropathy (DN). Methods. A total of 100 patients with DN treated in our hospital from May 2019 to June 2021 were included. The patients were randomly assigned to the control group and the study group. The control group received routine treatment, and the study group was treated with the classical theory of TCM. The efficacy, TCM syndrome score, urine proteinuria (UTP), urine albumin-creatinine ratio (UACR), plasma albumin (ALB), hemoglobin A1c (HbA1C), fasting blood glucose (FBG), blood urea nitrogen (BUN), creatinine (Cr), and treatment safety were compared between the two groups. Results. In comparison to the curative effect, the study group was significantly effective in 34 cases, effective in 12 cases, and ineffective in 4 cases, and the effective rate was 92.00%; the control group was significantly effective in 16 cases, effective in 18 cases, and ineffective in 16 cases, and the effective rate was 68.00%. The effective rate in the study group was higher compared to the control ( P < 0.05 ). In comparison to the TCM syndrome scores, there exhibited no significant difference before treatment ( P > 0.05 ), but after treatment, the TCM syndrome scores of the two groups decreased, and the TCM syndrome scores of the study group were lower compared to the control at 6 weeks, 12 weeks, 24 weeks, and 36 weeks of treatment ( P < 0.05 ). There exhibited no significant difference in the indexes of UTP and UACR before treatment, but the indexes of UTP and UACR in the two groups decreased after treatment, and the indexes of UTP and UACR in the study group were lower compared to the control at 6 and 12 weeks after treatment. There was no significant difference in the indexes of ALB, HbA1C, and FBG before treatment, but after treatment, the indexes of ALB increased, the indexes of HbA1C and FBG decreased in both groups, and the indexes of HbA1C and FBG i4n the study group were lower compared to the control, while the index of ALB in the study group was higher. The indexes of BUN and Cr were compared, and there was no significant difference before treatment, but after treatment, the indexes of BUN and Cr in the two groups decreased, and the indexes of BUN and Cr in the study group were lower compared to the control ( P < 0.05 ). In terms of the treatment safety of the two groups, there was no abnormality in blood, urine, stool routine, and liver and kidney function examination in the study group. No obvious adverse reactions were found in all patients. There were 1 case of abnormal liver function and 2 cases of rash in the control group, and there exhibited no significant difference ( P > 0.05 ). Conclusion. Under the guidance of classical theory, the optimization scheme of comprehensive treatment of TCM may improve renal function by improving metabolic disorders, vascular lesions, neurotrophic disorders, antioxidant stress, and other ways to repair nerve injury, improving the changes of TCM syndromes, signs, and indicators of patients, and delay the progress of DN.