Objective To observe the effects of moxibustion therapy on the improvements of clinical symptom scale score and neuropeptide substance in vascular dementia (VD) and investigate a mechanism of moxibustion for VD. Methods Eighty-seven cases of VD were divided randomly into a moxibustion group (43 cases) and a medication group (44 cases). In moxibustion group, the isolated moxibustion with Typhonium Rhizome was applied to Baihui (百会 GV 20), and suspended moxibustion was used on Shenting (神庭 GV 24) and Dazhui (大椎 GV 14). In medication group, Piracetam tablet was taken orally. After 4-session treatment, the scores in Hasegawa's Dementia Scale (HDS), Mini Mental Status Examination (MMSE) and Activity of Daily Living Scale (ADL) as well as the content of active substances, somatostatin (SS) and arginine vasopressin (AVP) in cerebral spinal fluid relevant with learning and memory were compared with those before treatment. Results The total effective rate was 81.4% (35/43) in moxibustion group, which was superior to 63.6% (28/44) in medication group (P〈0.01). The scores in HDS, MMSE and ADL after treatment were all improved as compared with those before treatment in two groups (P〈0.05, P〈0.01). The improvements of the scores in MMSE and ADL in moxibustion group were superior to those in medication group (both P〈0.05). After treatment, SS and AVP content in cerebral spinal fluid increased remarkably as compared with those before treatment in two groups (both P〈0.01), and SS and AVP levels after treatment in moxibustion group were improved significantly as compared with those in medication group (P〈0.05, P〈0.01). Conclusion Moxibustion therapy is superior to oral administration of Piracetam tablet no matter in the improvement of symptom scores or in the regulation of neuropeptide substances relevant with learning and memory, which deserves to be promoted in application.