Spleen deficiency diarrhea (SDD) is a common Traditional Chinese Medicine (TCM) gastrointestinal condition, the causes of which include dysfunction of the intestinal barrier and microbiota. Rice water-fried Atractylodis Rhizoma (RAR) is a commonly used drug to treat this condition, but its mechanism remains unclear. This study explored the related mechanisms of ethanolic extract of rice water-fried Atractylodis Rhizoma (EAR) in the treatment of SDD by examining changes in the intestinal microbiota. Wistar rats were randomly divided into 4 groups including the control, model, EAR low, and high-dose groups, 6 rats in each group. All rats, except the control group, were induced to develop SDD by a bitter-cold purgation method with rhubarb. The therapeutic effect of EAR on SDD was evaluated by pathological sections, inflammatory indicators (TNF-α, IL-1β, and IL-10), gastrointestinal-related indicators (GAS, DAO, D-lactate, VIP, and SIgA), and intestinal flora (bacteria and fungi) analysis. The results showed that the developed SDD rat model (model group) showed weight loss, decreased food intake, and increased fecal moisture content. Compared with those of the control group, the levels of TNF-α, IL-1β, DAO, D-lactate, and VIP in the model group were significantly increased, but the levels of IL-10, GAS and SIgA were significantly decreased (p < 0.05). However, the indicators were significantly improved after EAR treatment, indicating that EAR maintained the balance of pro- and anti-inflammatory cytokines and reduced gastric emptying, thereby protecting intestinal barrier function, alleviating intestinal mucosal injury, and relieving SDD by regulating the release of neurotransmitters. EAR was also shown to prevent infection by promoting the accumulation of noninflammatory immunoglobulin SIgA and improving intestinal mucosal immunity to inhibit the adhesion of bacteria, viruses, and other pathogens. Intestinal microbiome analysis showed that the intestinal bacteria and fungi of SDD model rats changed greatly compared with the control group, resulting in intestinal microecological imbalance. The reversal in the composition of the flora after EAR treatment was mainly characterized by a large enrichment of beneficial bacteria represented by Lactobacillus and a decrease in the abundance of potentially pathogenic fungi represented by Aspergillus. Thus, it was speculated that EAR primarily functions to alleviate SDD by increasing the abundance of beneficial bacteria and reducing the abundance of potentially pathogenic fungi. The strong therapeutic effect of EAR on SDD suggests that it is a promising treatment for this condition.