Accurately identifying new therapeutic uses for drugs is crucial for advancing pharmaceutical research and development. Matrix factorization is often used in association prediction due to its simplicity and high interpretability. However, existing matrix factorization models do not enable real-time interaction between molecular feature matrices and similarity matrices, nor do they consider the geometric structure of the matrices. Additionally, efficiently integrating multisource data remains a significant challenge. To address these issues, we propose a two-tier interactive weighted matrix factorization and label propagation model based on similarity matrix fusion (TIWMFLP) to assist in personalized treatment. First, we calculate the Gaussian and Laplace kernel similarities for drugs and diseases using known drug-disease associations. We then introduce a new multisource similarity fusion method, called similarity matrix fusion (SMF), to integrate these drug/disease similarities. SMF not only considers the different contributions represented by each neighbor but also incorporates drug-disease association information to enhance the contextual topological relationships and potential features of each drug/disease node in the network. Second, we innovatively developed a two-tier interactive weighted matrix factorization (TIWMF) method to process three biological networks. This method realizes for the first time the real-time interaction between the drug/disease feature matrix and its similarity matrix, allowing for a better capture of the complex relationships between drugs and diseases. Additionally, the weighted matrix of the drug/disease similarity matrix is introduced to preserve the underlying structure of the similarity matrix. Finally, the label propagation algorithm makes predictions based on the three updated biological networks. Experimental outcomes reveal that TIWMFLP consistently surpasses state-of-the-art models on four drug-disease data sets, two small molecule-miRNA data sets, and one miRNA-disease data set.