A herbal composition for diabetic retinopathy includes 40 wt % of an ethanol extract of Astragalus membranaceus, 8 wt % of an ethanol extract of Angelica sinensis and 52 wt % of a water extract of Dendrobium officinale. The present invention further relates to a method for diabetic retinopathy by administrating the herbal composition to a subject in need.