Purpose To investigate if a traditional Chinese medicine formulation, called “Yiqihuoxue” (YQHX), could improve diabetic atherosclerosis (DA) and explore potential mechanisms based on DNA methylation. Methods Apolipoprotein E-knockout mice were administered streptozotocin (50 mg/d, i.p.) for 5 days and fed a high-fat diet for 16 weeks. Mice were divided randomly into DA model, rosiglitazone, as well as low-, medium-, and high-dose YQHX groups. Ten healthy C57BL/6J mice were the control group. Serum levels of fasting insulin, blood glucose, homeostasis model-insulin resistance index (HOMA-IR), serum lipids, and inflammatory factors were analyzed after the final treatment. Aorta tissues were collected for staining (hematoxylin and eosin, and Oil red O). Genomic DNA was extracted for methyl-capture sequencing (MC-seq). Kyoto Encyclopedia of Genes and Genomes (KEGG) and Search Tool for the Retrieval of Interacting Genes/Proteins (STRING) databases were used to analyze differentially methylated genes. Pyrosequencing was used to verify MC-seq data. Results Low-dose and high-dose YQHX could reduce the HOMA-IR ( P < 0.05). Low-dose YQHX reduced expression of total cholesterol (TC), low-density lipoprotein-cholesterol (LDL-C), TNF-α, andI L-6 in serum compared with that in the model group ( P < 0.05). Medium-dose YQHX decoction inhibited the expression level of TNF-α ( P < 0.05). High-dose YQHX decreased the expression level of IL-6 ( P < 0.05). Staining also showed the anti-atherosclerosis effects of YQHX ( P < 0.05). MC-seq revealed many abnormally hypermethylated and hypomethylated genes in DA mice compared with those in the control group. KEGG database analysis showed that the hypermethylated genes induced by YQHX treatment were related to pathways in cancer, Hippo signaling, and mitogen activated protein kinase. The network analysis suggested that the hypermethylated genes epidermal growth factor receptor( Egfr ) and phosphoinositide-3-kinase regulatory subunit 1( Pik3r1 ) induced by YQHX treatment had important roles in DA. Pyrosequencing revealed that YQHX treatment increased methylation of AKT1, Nr1h3 and Fabp4 significantly ( P < 0.05). Conclusion YQHX decoction had positive treatment effects against DA, because it could regulate aberrant hypomethylation of DNA.