Background: Alzheimer's disease (AD) is the most common type of dementia in the elderly. It is estimated that the global prevalence of dementia will rise from 24.3 million in 2005 to 81.1 million in 2040. AD has a devastating impact on sufferers, caregivers, their communities and the healthcare system in general. "Di-tan decoction" (DTD) is a traditional Chinese medicine (TCM) formula frequently used to treat symptoms that are now defined as AD in clinical treatment. However, the existing evidence for recommending DTD in clinical practice derives from studies that were methodologically flawed. In this study, we aim to determine the efficacy and safety of DTD in AD patients based on a rigidly randomized controlled trial. It will provide critical information on sample size and treatment regimen for conducting a full-scale clinical trial of DTD later. Methods/Design: This study will be a double-blind, randomized, placebo-controlled, add-on trial. After a 2-week run-in period, eligible patients with mild to moderate AD will be recruited and given either DTD or placebo twice daily for 24 weeks with follow-up 6 weeks after the last treatment. An increase of four points or greater on the scores of Alzheimer's Disease Assessment Scale-cognitive subscale (ADAD-cog) will be considered as a positive primary outcome. Total scores of the ADAD-cog, the Chinese version of Mini-Mental State Examination (C-MMSE), and the Chinese version of the Disability Assessment for Dementia (C-DAD) score will be used as secondary outcomes. Adverse events will also be reported. Discussion: This randomized trial will be the first rigorous empirical study on the efficacy of DTD for treating cognitive symptoms in AD patients. Its success will justify and warrant a large-scale clinical trial to further consolidate the evidence for DTD's efficacy in treating AD.