Objective: Observe the clinical efficacy of Shugan Xiaoying Decoction in treating thyroid nodules. Method: Sixty patients with thyroid nodules from September 2024 to September 2025 at the Second Affiliated Hospital of Xingtai Medical College were randomly divided into a control group (30 cases) and a treatment group (30 cases) using a random number table method. The control group received conventional Western medicine treatment, while the treatment group received additional treatment with Shugan Xiaoying Powder on this basis. Compare the clinical efficacy between two groups of patients after 3 months of intervention; Compare the TCM syndrome scores, thyroid ultrasound, and adverse reactions between two groups of patients. Result: The total effective rate of the treatment group was higher than that of the control group after treatment (P < 0.05), and the TCM syndrome score of the treatment group was lower than that of the control group (P < 0.05). After treatment, the number of nodules in the treatment group was less than that in the control group, and the longest diameter of nodules was shorter than that in the control group (P < 0.05). However, there was no significant change in the number of nodules and the longest diameter of nodules in the control group before and after treatment (P > 0.05). One patient in the treatment group experienced nausea and bloating after taking traditional Chinese medicine, and the symptoms disappeared after treatment. Conclusion: Shugan Xiaoying Decoction can improve the traditional Chinese medicine syndrome score of patients with thyroid nodules, enhance clinical efficacy, reduce thyroid nodules, decrease the number of nodules, and is safe and reliable.