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Introduction: Diabetic kidney disease (DKD) is a severe and growing health problem, associated with a worse prognosis and higher overall mortality rates than non-diabetic renal disease. Chinese herbs possess promising clinical benefits in alleviating the progression of DKD due to their multi-target effect. This real-world retrospective cohort trial aimed to investigate the efficacy and safety of Naoxintong (NXT) capsules in the treatment of DKD. Our study is the first real-world study (RWS) of NXT in the treatment of DKD based on a large database, providing a basis for clinical application and promotion. Methods: The data was collected from Tianjin Healthcare and Medical Big Data Platform. Patients with DKD were enrolled from January 1, 2011, to March 31, 2021. NXT administration was defined as the exposure. The primary outcome was the change in estimated glomerular filtration rate (eGFR). We employed the propensity score matching (PSM) method to deal with confounding factors. Results: A total of 1,798 patients were enrolled after PSM, including 899 NXT users (exposed group) and 899 non-users (control group). The eGFR changes from baseline to the end of the study were significantly different in the exposed group compared to the control group (-1.46 ± 21.94 vs -5.82 ± 19.8 mL/(min·1.73m2), P< 0.01). Patients in the NXT group had a lower risk of composite renal outcome event (HR, 0.71; 95%CI, 0.55 to 0.92; P = 0.009) and deterioration of renal function (HR, 0.74; 95% CI, 0.56 to 0.99; P = 0.039). Conclusion: NXT can significantly slow the decline of eGFR and reduce the risk of renal outcomes. However, large cohort studies and RCTs are needed to further confirm our results. [ABSTRACT FROM AUTHOR]