OBJECTIVE: To investigate the clinical efficacy of traditional Chinese medicine (TCM) compound in the treatment of knee osteoarthritis (KOA) and its impact on inflammatory cytokine levels. METHODS: A retrospective analysis was conducted on the medical records of 80 KOA patients admitted to Hebei Province Hospital of Chinese Medicine from January 2021 to January 2023. The patients were divided into an observation group and a control group based on different treatment methods (n=40 each group). The visual analogue scale (VAS) was adopted to assess patients' pain level, and the Lysholm score was used to evaluate knee joint function, and the clinical outcomes of the two groups were compared. RESULTS: After treatment, both groups exhibited a significant decrease in VAS scores, with the observation group showing a more substantial reduction(P<0.05). The Lysholm scores of both groups were significantly higher after treatment than before treatment (P<0.05). Serum levels of CRP, IL-6, and TNF-α decreased significantly in both groups after treatment, with the observation group showing a more pronounced reduction (P<0.05). The ADL scores for both advanced and basic abilities improved significantly post-treatment in both groups, with the observation group demonstrating a statistically significant greater improvement (P<0.05). The treatment efficacy for the observation group was 92.50%, which was significantly higher than the control group's rate of 77.50% (χ²=4.114, P<0.05). CONCLUSION: Traditional Chinese Medicine(TCM) compound therapy for KOA can significantly alleviate patients' pain, reduce the expression of inflammatory factors in serum, enhance knee joint function, and improve patients' quality of life.