Background. Malignant pleural effusion (MPE) is a common complication in most malignancies. Despite its frequent occurrence, current knowledge of MPE remains limited and the effect of the management is still unsatisfying. Traditional Chinese medicine (TCM) external treatment has unique advantages, such as quicker efficacy and fewer side effects. Objective. To observe the effects and safety of Kang'ai Xiaoshui ointment (TCM herbal ointment) in MPE. Design. This was a placebo-controlled double-blinded randomized study. A total of 80 patients were enrolled, of which 72 were randomized to receive Kang'ai Xiaoshui ointment or placebo at an allocation ratio of 1:1. Kang'ai Xiaoshui ointment or placebo was applied on the thorax wall for 8 hours daily. The intervention lasted 2 weeks. Kang'ai Xiaoshui ointment consisted of Astragalus membranaces (??), Semen pharbitidis (???), Cassia twig (??), Pericarpium arecae (???), Curcuma zedoary (??), Borneol (??), and other substances. In both groups, diuresis and drainages were used as needed. Outcomes covered the quantity of pleural effusion evaluation, TCM Symptom Scale, Karnofsky Performance Scale, and safety indicators such as routine blood test, blood biochemistry test, and response table of skin irritation. Results. Of 72 patients randomized to receive Kang'ai Xiaoshui ointment or placebo along with symptomatic treatment, the response rate was documented as 42.4% for the treatment group and 25.0% for the placebo group (P = .138). As for the TCM symptom scale, the treatment group showed improvement in chest distress (P = .003), fullness and distention (P = .042), shortness of breath (P < .001), no statistical significance in palpitation (P = .237), and pain (P = .063), whereas the placebo group did not show statistical significance in any of the 5 symptoms. Major adverse events related to the treatment, mainly skin irritation, were distributed equally. Conclusions. Kang'ai Xiaoshui ointment showed a potential of reducing MPE, and it could alleviate symptoms of dyspnea. Thus, it may be appropriate as a supplementary intervention for MPE. There were some flaws in the study design. A larger scale and better designed trial is advocated.