Objective: To investigate the effect of Cordyceps sinensis (Bailing Capsule, fermented agent of C. sinensis) on renal function of patients with chronic allograft nephropathy (CAN). Methods: A total of 231 CAN patients who underwent transplantation between 2005 and 2008 and experienced chronic graft dysfunction were randomly divided into 2 groups. Patients in group A (n = 122) were treated with immunosuppressive agents and C. sinensis (2.0 g/day, 3 times a day), while patients in group B (n = 109) were treated with traditional immunosuppressive drugs. Serum creatinine (SCr), blood urea nitrogen (BUN), creatinine clearance rate (C_Cr) and urinary protein in 24 h (24-hour Upro) of all patients were measured before and after treatment. Urinary concentrations of transforming growth factor (TGF)-β₁, retinol-binding protein (RBP) and β₂-microglobulin (β₂-MG) were detected at the same time. Results: After 6-month treatment with C. sinensis, SCr and C_Cr in group A were significantly improved (p < 0.05), while there was no significant improvement observed for group B. There was no significant change in BUN in groups A and B (p > 0.05). 24-hour Upro, RBP and β₂-MG were lower in group A after treatment with C. sinensis (p < 0.05 or p < 0.01), and urinary TGF-β₁ in group A was significantly lower than the values before C. sinensis treatment (p < 0.05), but showed no change in patients of group B. In group A, renal function had improved in 72 cases, stabilized in 38 cases, and worsened in 12 cases. In group B, renal function had improved in 14 cases, stabilized in 50 cases, and worsened in 45 cases (p < 0.05). Conclusion:C. sinensis therapy is advantageous in improving renal function of CAN patients by retarding CAN progression.