A topically used Chinese herbal paste, namely, CDNR, was designed to facilitate fracture healing which is usually not addressed in general hospital care. From our in vitro studies, CDNR significantly inhibited the release of nitric oxide from RAW264.7 cells by 51 to 77%. This indicated its anti-inflammatory effect. CDNR also promoted the growth of bone cells by stimulating the proliferation of UMR106 cells up to 18%. It also increased the biomechanical strength of the healing bone in a drill-hole defect rat model by 16.5% significantly. This result revealed its in vivo efficacy on facilitation of bone healing. Furthermore, the detection of the chemical markers of CDNR in the skin and muscle of the treatment area demonstrated its transdermal properties. However, CDNR did not affect the bone turnover markers in serum of the rats. With its anti-inflammatory and bone formation properties, CDNR is found effective in promoting bone healing.