This study aimed to explore the efficacy and mechanism of Chanling Gao (CLG), a compound Chinese medicine, on colorectal cancer (CRC). A model of transplanted CRC was established in nude mice. The mice were treated 7 days after CRC transplantation with either Capecitabine or CLG for 3 weeks. On the 28th day after the operation, CRC growth and liver metastasis were assessed by morphology, the changes in the expression of HIF-1α (hypoxia inducible factor-1α), stromal cell-derived factor-1 alpha (SDF-1α), CXCR4 (C-X-C chemokine receptor type 4), PI3K, and Akt in the transplanted tumor and SDF-1α and CXCR4 in the liver were detected by Western blot and immunohistochemistry. The protein contents of vascular endothelial growth factor (VEGF), matrix metalloproteinase (MMP)-2, and collagen IV in the serum and transplanted tumor and SDF-1α and CXCR4 in liver tissues were detected by enzyme-linked immunosorbent assay. In the Capecitabine and high dose CLG groups, the growth and liver metastasis of CRC were significantly inhibited, the protein levels of HIF-1α, SDF-1α, CXCR4, MMP-2, VEGF, PI3K, Akt, P-PI3K and P-Akt in the transplanted tumor were lower, while the content of collagen IV in the transplanted tumor was higher, than in Model group. A high dose of CLG inhibited the growth of transplanted tumor and liver metastasis of CRC in nude mice, probably by inhibiting the HIF-1α/SDF-1α-CXCR4/PI3K-Akt signaling pathway reducing the synthesis and release of VEGF and degradation of collagen IV.