The invention discloses blood sugar reducing traditional Chinese medicinal herb which is mainly prepared from the following raw materials: Ligusticum wallichii, rhizoma atractylodis and papaya milk powder. In the formula, rhizoma atractylodis has the function of drying damp and strengthening spleen and tonifying qi and yin, Ligusticum wallichii has the function of invigorating the circulation of blood and promoting the circulation of qi as well as dispelling wind and relieving pain, and papaya milk powder has the function of pleiotropic immunomodulatory effect, enhancing the health of diabetics, accelerating metabolism and improving the glucose metabolism of the organism. Medicines are combined in use to achieve the effects of clearing heat, invigorating the circulation of blood, invigorating spleen and supplementing qi, enriching yin and nourishing kidney, inducing diuresis with bland drug and reducing the blood sugar. In addition, as Ligusticum wallichii and rhizoma atractylodis are traditional Chinese medicines which are in homology of medicine and food, and papaya milk powder is an extract of papaya, so that the traditional Chinese medicinal herb is very safe to take, free from any acute and subacute or chronic hazard to a human body and suitable for long-term use. The traditional Chinese medicinal herb provided by the invention is scientific and reasonable in formula, exact in blood reducing effect, safe and effective. The product is prepared as an oral solid preparation which is stable in quality and convenient to carry and take, and is suitable for long-term use by diabetics.