Dang-Gui-Bu-Xai-Tang (DGBXT), which includes Radix Angelicae Sinensis and Radix Astragali Membranaceus, is a traditional Chinese medicine used to modulate the lymphocyte activity of cancer patients after chemotherapy and radiotherapy. In the present study, we examined the cytotoxicity of DGBXT on transformed cells and the immunomodulating effects of DGBXT in a tumor-bearing murine model. DGBXT markedly inhibited the growth of the EJ-Ha-ras transformed LZEJ and LZEJ-C2 cells lines. Oral administration of DGBXT for three weeks significantly prevented the tumor development in mice that injected with LZEJ-C2 cells subcutaneously. Moreover, DGBXT effectively increased the population of cytotoxic T lymphocytes (CTLs) and NK cells, and down-regulated activated T helper cells (CD4+/CD25+) in spleen and tumor-draining lymph nodes (TDLN). Furthermore, DGBXT stimulated the production of tumor necrosis factor-alpha in in vitro cultured splenocytes. These results might explain the antitumor effects of DGBXT.