Chronic atrophic gastritis (CAG) is a prevalent chronic gastritis usually accompanied by precancerous lesions such as intestinal metaplasia and dysplasia. The increasing application of traditional Chinese medicine in CAG treatment has shown promising results with low side effects and significant efficacy. To investigate the pharmacological effects of Yiqi Jiedu Huayu decoction (YJHD) on precancerous lesions of CAG. A CAG rat model was established by Helicobacter pylori bacteria solution combined with N-methyl-N'-nitro-N-nitrosoguanidine. Histopathological measurements were conducted by hematoxylin-eosin and alcian blue and periodic acid-Schiff staining. Serum levels of inflammatory factors and gastric mucosal-related factors were examined using enzyme-linked immunosorbent assay. Protein and mRNA levels were quantified via western blot and quantitative real-time polymerase chain reaction analysis, respectively. Molecular interaction was verified by chromatin immunoprecipitation (ChIP) assay. YJHD greatly attenuated pathological changes in the gastric mucosa and precancerous lesions in CAG rats. Meanwhile, YJHD treatment reduced serum levels of inflammatory factors [interleukin (IL)-6, tumor necrosis factor-α and C-reactive protein] and increased serum levels of gastric mucosal-related factors (gastrin, pepsin, somatostatin and prostaglandin E2) in CAG rats. In addition, YJHD administration suppressed NLRP3 inflammasome-mediated cell pyroptosis, as well as the activation of TLR4/NF-κB and IL-6/STAT3 signaling pathways. Mechanically, ChIP experiments confirmed that NLRP3 transcription was regulated by TLR4/NF-κB and IL-6/STAT3 signaling. Taken together, YJHD alleviated NLRP3 inflammasome formation and pyroptosis of epithelial cells in CAG, potentially through the inactivation of TLR4/NF-κB and IL-6/STAT3 pathways.