Objective To investigate the clinical effect of dynamic moxibustion in the treatment of knee osteoarthritis (KOA) with deficiency of liver and kidney. Methods A total of 60 patients with KOA with deficiency of liver and kidney who met the inclusion criteria were randomly divided into experimental group and control group, with 30 patients in each group. The patients in the experimental group were treated with dynamic moxibustion, while those in the control group were treated with conventional acupuncture, once a day for 21 consecutive days as one course of treatment. After one course of treatment, the two groups were compared in terms of Visual Analogue Scale (VAS) score, Western Ontario and McMaster Universities Osteoarthritis Index (WOMAC) score, traditional Chinese medicine (TCM) score, and clinical outcome, and adverse reactions were recorded for both groups. Results After treatment, both groups had significant improvements in VAS score, WOMAC score, and TCM symptom score (P<0.05), and the experimental group had significantly better improvements than the control group (P<0.05). The experimental group had a significantly better clinical outcome than the control group (P<0.05). One patient in the control group experienced acupuncture syncope, which was not observed in the experimental group. Conclusion Dynamic moxibustion has a marked clinical effect in the treatment of KOA with deficiency of liver and kidney, with few adverse reactions, and can effectively alleviate the pain of the knee joint and improve patients' quality of life.