The rapidly increasing incidence of diabetes mellitus (DM) is becoming a major public health issue. As one of the important parts in complementary and alternative therapies, traditional Chinese medicine (TCM) is promising in treating DM. In this review, we summarize new thoughts on treating DM that aim to improve the clinical efficacy of TCM from the perspectives of principle, methods, formula, herbs, and doses. Our approach is as follows: principle: we use a combination of symptoms, syndromes, and diseases as a new mode for treating diabetes; methods: emphasizing heat-clearing in the early and middle stage of T2DM and invigorating blood circulation throughout the whole process of T2DM are two innovative methods to treat T2DM; formulas and herbs: choosing formulas and herbs based on the combination of TCM theory and current medicine. We will emphasize four strategies to help doctors choose formulas and herbs, including treatment based on syndrome differentiation, choosing herbs of bitter and sour flavors to counteract sweet flavor, choosing formulas and herbs aimed at main symptoms, and using modern pharmacological achievements in clinical practice; dose: reasonable drug dose plays an important role in the treatment of DM and a close relationship exists between dose and clinical efficacy.