Objective: To study the effect of fumigation and washing with Shujin Huoluo Decoction combined with Duhuo Parasitic Decoction on Metalloproteinase inhibitor-1 (TIMP-1) and Oxyphosphatase 1, PON1) level. Methods: A total of 100 KOA patients, 59 males and 41 females, were selected for diagnosis and treatment in our hospital from November 2018 to November 2019. The patients were divided into the control group and the combined group with 50 patients each according to a completely random method. The control group was treated with Duhuo Parasitic Decoction and the combined group was treated with Duhuo Parasitic Decoction and Shujinhuoluo decoction. Detection of TIMP-1, PON1, Matrix metalloproteinase-3 (MMP-3), C-reactive protease (CRP), Tumor necrosis factor-alpha (TNF-α) and Superoxide dismutase (SOD) levels. WOMAC score, Lysholm score, and VAS score were evaluated. Results: The levels of TIMP-1 and PON1 in the combined group were higher than those in the control group after treatment, and the levels of MMP-3 were lower than those in control group (P < 0.05). The WOMAC score and VAS score of the combined group were lower than those of the control group, and the Lysholm score was higher than that of control group (P < 0.05). The levels of CRP and TNF-α in the combined group were lower than those in the control group, and the SOD levels were higher than those in control group (P < 0.05). The total effective rate of the combined group was higher than the total effective rate of control group (P < 0.05). Conclusion: The combination of fumigation and washing with Shujin Huoluo Decoction and Duhuo Parasitic Decoction has a significant effect on the treatment of KOA patients. It improves the levels of TIMP-1 and PON1, improves the knee function of patients and pain.