The aim of this study is to investigate whether or not You Gui Wan (YGW), a classical herbal formula in Traditional Chinese Medicine (TCM), has an impact on rat uterine and vaginal atrophic processes induced by ovariectomy (OVX). Thirty-four OVX Sprague-Dawley (SD) rats were randomly divided into three sets, and orally administrated with YGW decoction, saline or estrogen for 11 weeks, respectively. Histomorphological changes of the uterus and vagina, and serum estradiol levels were then compared. Results showed that OVX caused a dramatic atrophy of the uterus and vagina in the rats. Estrogen replacement reversed the effect of OVX, but with a side effect of endometrial hyperplasia. YGW had no significant effect on blood estradiol concentration or uterine histology, but it significantly overturned the atrophic processes of the vaginal fold and blood vessels in the lamina propria. In order to initially explore the mechanisms underlying these effects, immunostaining of estrogen receptor (ER)-α and -β in the vagina was performed. It was shown that OVX reduced expressions of ER while YGW and estrogen replacement reversed this reduction. Our findings suggest that YGW can reverse the atrophic effect of OVX on rat vaginal plica and blood vessels in the lamina propria with little adverse effect on endometrial hyperplasia. This indicates the herbal formula as an alternative to hormone replacement therapy in the management of menopausal vaginal atrophy. Recovery of ER expressions in the vagina might be one of mechanisms underlying the effects of YGW.