The invention belongs to the field of traditional Chinese medicine, and in particular, relates to a traditional Chinese medicine compound composition for treating chronic atrophic gastritis and gastric precancerous lesions and an application thereof. The traditional Chinese medicine composition is prepared from the following raw material medicines in parts by weight: codonopsis pilosula, roasted rhizoma atractylodis macrocephalae, ginger processed pinellia, radix scutellariae, coptis chinensis, endothelium corneum gigeriae galli, cuttlebone, radix aucklandiae, rhizoma smilacis glabrae, baked ginger, oldenlandia diffusa, radix salviae miltiorrhizaea, pericarpium citri reticulatae and magnolia officinalis. The traditional Chinese medicine composition has the functions of invigorating qi, invigorating spleen, eliminating ruffian and eliminating stagnation, is suitable for syndromes of weak spleen and stomach, and stagnation of turbid phlegm poison, and can be used for treating chronic atrophic gastritis with intestinal metaplasia or dysplasia.