The invention discloses a traditional Chinese medicine for treating lupus erythematosus and inhibiting glucocorticoid side effect and an application of the traditional Chinese medicine. The traditional Chinese medicine comprises the following components by weight percent: 6.81-17.62% of polygonum multiflorum, 8.82-13.33% of root of rehmannia, 4.54-8.84% of rhizoma polygonati, 4.54-8.84% of dogwood, 5.88-7.81% of moutan bark, 9.82-14.66% of root of common peony, 5.88-9.09% of sweet wormwood, 3.54-5.88% of turtle shell, 4.88-9.09% of rhizoma anemarrhenae, 4.88-9.09% of golden cypress, 8.88-13.66% of herba violae and 4.44-6.54% of rhizoma alismatis. The medicine is applied to treating lupus erythematosus, can be used by being coordinated with glucocorticoid, can treat systematic lupus erythematosus, can intervene the side effects induced when glucocorticoid in a large dose is used for treating the lupus erythematosus, has the efficacy of nourishing liver and kidney, nourishing yin, lessening fire, cooling blood, dissolving stasis, and treating both principal and secondary aspects of diseases, is safe and effective, and can be applied to preparing the medicament for treating lupus erythematosus and inhibiting glucocorticoid.