Objectives To provide a broad evaluation of the efficacy and safety of oral Chinese herbal medicine (CHM) as an adjunctive treatment for diabetic kidney disease (DKD), including mortality, progression to end-stage kidney disease (ESKD), albuminuria, proteinuria and kidney function. Design A systematic review and meta-analysis. Methods Randomised controlled trials (RCTs) comparing oral CHM with placebo as an additional intervention to conventional treatments were retrieved from five English (Cochrane Central Register of Controlled Trials, MEDLINE, Embase, Allied and Complementary Medicine Database and Cumulative Index of Nursing and Allied Health Literature) and four Chinese databases (China BioMedical Literature, China National Knowledge Infrastructure, Chonqing VIP and Wanfang) from inception to May 2018. RCTs recruiting adult DKD patients induced by primary diabetes were considered eligible, regardless of the form and ingredients of oral CHM. Mean difference (MD) or standardised mean difference (SMD) was used to analyse continuous variables and RR for dichotomous data. Results From 7255 reports retrieved, 20 eligible studies involving 2719 DKD patients were included. CHM was associated with greater reduction of albuminuria than placebo, regardless of whether renin-angiotensin system (RAS) inhibitors were concurrently administered (SMD -0.56, 95% CI [-1.04 to -0.08], I-2=64%, p=0.002) or not (SMD -0.92, 95% CI [-1.35 to -0.51], I-2=87%, p<0.0001). When CHM was used as an adjunct to RAS inhibitors, estimated glomerular filtration rate was higher in the CHM than placebo group (MD 6.28 mL/min; 95% CI [2.42 to 10.14], I-2=0%, p=0.001). The effects of CHM on progression to ESKD and mortality were uncertain due to low event rates. The reported adverse events in CHM group included digestive disorders, elevated liver enzyme level, infection, anaemia, hypertension and subarachnoid haemorrhage, but the report rates were low and similar to control groups. The favourable results of CHM should be balanced with the limitations of the included studies such as high heterogeneity, short follow-up periods, small numbers of clinical events and older patients with less advanced disease. Conclusions Based on moderate to low quality evidence, CHM may have beneficial effects on renal function and albuminuria beyond that afforded by conventional treatment in adults with DKD. Further well-conducted, adequately powered trials with representative DKD populations are warranted to confirm the long-term effect of CHM, particularly on clinically relevant outcomes.