The invention belongs to the daily chemical field. A microcapsule Chinese herbal medicine composition capable of inhibiting bacteria, resisting inflammation and promoting blood circulation is preparedfrom a microcapsule inclusion and following ingredients in parts by weight: polygoni multiflori radix, cacumen platycladi, Zingiber officinale Rosc. roots, radix angelicae sinensis, Eclipta prostrata(L.) L., Piper nigrum L seeds, capsicum annuum fructus and yeast extracts. The composition has the efficacy of resisting inflammation, inhibiting bacteria, promoting blood circulation, preventing hair loss, restoring hair and nourishing hair. According to the preparation method disclosed by the invention, various Chinese herbal medicines are mixed and extracted so as to prevent from importing excessive impurities, the high purity of the active ingredients of an extracting solution is guaranteed, and the microcapsule Chinese herbal medicine composition is moderate and inirritative. The microcapsule inclusion is adopted to carry out inclusion protection on a traditional Chinese medicine compound extracting solution and the yeast extracts, and the stability and the high activity of effectiveingredients are improved. During utilization, the microcapsule Chinese herbal medicine composition exhibits better pertinence, a higher medicine effect and an obvious effect, and a treatment period is effectively shortened.