The invention relates to a method for treating chronic atrophic gastritis. According to the method, Radix Codonopsis, Radix Astragali,fried atractylodes, Poria cocos, Salvia chinensis,Smilax glabra, raw coix seeds, red sage root, costus root, coke hawthorn and medicated leaven, rice-grain sprout and malt and radix glycyrrhizae are used as main raw materials; for patients with interior accumulation of dampness and turbid, rhizoma atractylodis and cortex magnoliae officinalis are added; for patients with endoretention of damp heat, rhizoma coptidis from Sichuan of China and radix scutellariae are added; for patients with liver-stomach disharmony, radix bupleuri and rhizoma cyperi are added; and for patients with lack of stomach yin, ladybell root, glehnia root and dendrobium are added. The above medicines are decocted with water. One dose of the drug is used daily, once in the morning and once at night. Three months is a treatment course. The drug is taken for 2 treatment courses. The drug will have an obvious effect generally 6 months after drug withdrawal.