Background: Diabetic kidney disease (DKD) is one of the most common microvascular complications of diabetes mellitus and the main cause of end-stage renal disease. Present medications for DKD are not entirely satisfactory. Preliminary studies indicate that the Chinese herbal formula Tangshen Formula (TSF) appears to decrease the proteinuria and improve the estimated glomerular filtration rate (eGFR) in DKD patients. Methods/design: This trial is a five-center, randomized, double-blind, placebo-controlled study. DKD patients with a 24-h urinary protein (24 h UP) level between 0.5 and 3.5 g and serum creatinine < 265 mu mol/L (3 mg/dl) will be included. A sample size of 144 participants will be randomly distributed into the treatment group (TSF plus irbesartan) and the control group (placebo plus irbesartan) at a ratio of 1:1. The study duration will be 50 weeks, comprising a 2-week run-in period, 24 weeks of intervention, and 24 weeks of follow-up. The primary endpoint will be the 24 h UP. Secondary endpoints will be an evaluation of renal function, management of blood lipids, improvement in traditional Chinese medicine symptoms, and safety assessments. Adverse events will also be evaluated. Discussion: This study will provide evidence for the effectiveness and safety of TSF compared to placebo in treating DKD patients with macroalbuminuria.