The invention relates to an externally applied medicament for treating rheumatoid arthritis and hyperosteogeny and a preparation method thereof. The externally applied medicament is prepared from the following raw materials: radix angelicae sinensis, safflower carthamus, ground beeltle, caulis spatholobi, myrrh, frankincense, large-leaved gentian, medicinal cyathula root, angelica dahurica, notopterygium root, radix sileris, drynaria rhizome, monkshood, radix aconiti agrestis, garden balsam stem, honeysuckle stem, common threewingnut root, ramulus mori, Dioscorea nipponica Makino, Rhizoma Homalomenae, cinnamon, cassia twig, baked ginger, radix stephaniae tetrandrae, rhizoma cibotii, caulis piperis kadsurae, lycopodium clavatum, radix clematidis, kudzuvine root, erycibe obtusifolia benth, loose knot, sangusis draconis, scorpion, centipede, pseudo-ginseng and honeysuckle. The preparation method comprises the following steps of: adding 3000ml water into the high quality traditional Chinese medicine raw materials, soaking for 2 hours, boiling with strong fire, decocting with slow fire for 1 hour, filtrating residues, concentrating the filtered liquid to 400ml, and subpackaging in a way of each bottle with 50ml, and sterilizing the decoction at a high temperature for later use. The traditional Chinese medicines are reasonably matched; and the medicament is direct in efficacy, low in cost, and convenient to use.