The invention relates to the technical field of medicine preparation from Chinese herbal medicines, in particular to a traditional Chinese medicine for treating diabetes mellitus and a preparation method of the traditional Chinese medicine. The traditional Chinese medicine for treating diabetes mellitus is prepared from raw materials including ginseng, prepared rehmannia root, ophiopogon root, Chinese magnoliavine fruit, Chinese angelica, milkvetch root, common anemarrhena rhizome, fresh rehmannia root, tree peony bark, asiatic cornelian cherry fruit, common yam rhizome, poria cocos, oriental waterplantain rhizome, girald jasmine root, kudzuvine root, largehead atractylodes rhizome, snakegourd root, barbary wolfberry fruit, chrysanthemun flower, root of Panax notoginseng, mulberry, Cochinchinese asparagus root, fiveleaf gynostemma herb, adenophora root, Chinese thorowax root, nutgrass galingale rhizome, orange fruit, tall gastrodia tuber, calcined gypsum, chicken's gizzard-skin, white peony root, danshen root, fleeceflower root, fragrant solomonseal rhizome and the like through mixing in a certain weight ratio. The traditional Chinese medicine for treating diabetes mellitus is simple to prepare, can effectively reduce the blood glucose level, is mild in nature, has little irritation on the gastrointestinal tract and can replace insulin, recover functions of pancreatic islets and prevent and treat complications; after the blood glucose is steady, functions of the five internal organs damaged for a long time can be recovered if a trace of the traditional Chinese medicine is taken continuously.