Objective To explore the efficacy and mechanism of Yinzhihuang Granule combined with entecavir in patients with chronic hepatitis B (CHB). Methods Eighty CHB patients admitted to Luoyang Central Hospital from January 2022 to January 2025 were prospectively selected and randomly assigned using a random number table. The control group (n＝40) received entecavir treatment, while the study group (n＝40) received entecavir combined with Yinzhihuang Granule, with a treatment period of 12 months. The antiviral efficacy, total bilirubin (TBIL), aspartate aminotransferase (AST), γ-glutamyl transferase (GGT), alanine aminotransferase (ALT), interleukin (IL)-6, tumor necrosis factor-α (TNF-α), IL-8, nuclear factor erythroid 2-related factor 2 (Nrf2), heme oxygenase-1 (HO-1) before treatment and after 12 months of treatment, and safety were compared between the two groups. Results After treatment, the hepatitis B e Antigen (HBeAg) seroconversion rate, Nrf2 and HO-1 levels in the study group were significantly higher than those in the control group (all P＜0.05), and the levels of HBV-DNA quantitative, TBIL, AST, GGT, ALT, IL-6, TNF-α, and IL-8 were significantly lower than those in the control group (all P＜0.05); there was no significant difference in the incidence of adverse reactions between the two groups (P＞0.05). Conclusion Yinzhihuang Granule combined with entecavir is effective in treating CHB, which can improve patients’ liver function and has good safety. Its mechanism may be related to regulating the secretion of inflammatory factors and the Nrf2/HO-1 antioxidant pathway.