The purpose of this study is to explore the psychological efficacy of Xinwei Decoction, a traditional Chinese herbal medicine, to treat functional dyspepsia (FD) accompanied with depression and anxiety. Seventy-three subjects, divided into three groups, had been given herbal medicine (Xinwei Decoction), prokinetic agent (Domperidone) and placebo, respectively for 8 weeks. Before and after treatment, all subjects were examined with FD symptom scale, Hamilton Depression Scale (HAMD) and Hamilton Anxiety Scale (HAMA). As a result, the total scores of the three groups in FD symptom scale, HAMD and HAMA after treatment decreased in different levels, with the decrease in the herbal group more significant than the other two groups (p < 0.01), indicating the efficacy of the herbal medicine. The total effective rates of the herbal, Domperidone and placebo groups were 90%, 67% and 31%, respectively, which indicated significant effect differences between Xinwei Decoction and Domperidone (p < 0.05) and between Xinwei Decoction and placebo (p < 0.01), showing that the efficacy of herbal therapy was superior to that of the other two therapies. Furthermore, there was no one in the Domperidone and placebo groups being cured of depression and anxiety, while the curing rate in the herbal group was about 70%, indicating the efficacy of herbal medicine in comparison to that of Domperidone and placebo for anti-depression and anti-anxiety. The result demonstrated that Xinwei Decoction could not only alleviate FD symptoms but also relieve depression and anxiety.