The invention discloses a traditional Chinese medicinal composition for strengthening spleen and activating collaterals and an application thereof. The formula comprises the following components in parts by weight: 15-25 parts of radix puerariae, 12-18 parts of radix salviae miltiorrhizae, 25-35 parts of rhizoma atractylodis macrocephalae, 25-35 parts of radix codonopsis, 8-12 parts of cortex phellodendri, 8-12 parts of rhizoma acori graminei, 12-18 parts of pheretima, 8-12 parts of ligusticum wallichii, 25-35 parts of radix astragali and 8-12 parts of radix notoginseng. The traditional Chinese medicinal composition is a prescription for treating diabetes from treatise on the spleen and stomach, has the functions of strengthening spleen and supplementing qi, and promoting blood circulationto remove meridian obstruction, is used for treating diabetes caused by spleen deficiency and collateral stasis, with the symptoms, such as polydipsia, polyuria and polyphagia due to dry mouth, fatigue and asthenia, sallow or darkish complexion, abdominal fullness and distention, poor appetite, squamous and dry skin, limb paralysis and pain, dominated stabbing pain, aggravated pain at night, intermittent claudication, hemiplegia, distortion of commissure, pale and dingy tongue with bruises, white tongue fur, deep, thin and astringent pulses and the like, and has an obvious curative effect after being taken by patients with the syndromes, such as diabetes and diabetic peripheral neuropathy, diabetic angiopathy, diabetic retinopathy, diabetes complicated with a coronary heart disease and diabetes complicated with cerebral infarction.