The invention belongs to the technical field of traditional Chinese medicines, and discloses a composition for treating gout and rheumatoid osteoarthritis and a preparation method thereof. The composition is prepared from astragalus membranaceus, bighead atractylodes rhizome, poria cocos, chamomile flowers, honey-fried licorice roots, notopterygium roots, divaricate saposhnikovia roots, schizophragma integrifolium, radix achyranthis bidentatae, ligusticum wallichii, radix bupleuri, trogopterus dung, myrrh, semen brassicae, fried fennel, dried ginger, cinnamon and monkshood in an optimal proportion. In the prescription, astragalus membranaceus has the effects of tonifying spleen and strengthening the middle warmer, ascending up spleen-qi and yang, benefiting defensive Qi and strengthening exterior, inducing diuresis, and draining toxin and promoting granulation; bighead atractylodes rhizome has the effects of eliminating dampness and inducing diuresis; poria cocos has the effects of inducing diuresis to alleviate edema; and chamomile flowers, honey-fried licorice roots, notopterygium roots, divaricate saposhnikovia roots, schizophragma integrifolium, radix achyranthis bidentatae, ligusticum wallichii, radix bupleuri, trogopterus dung, myrrh, semen brassicae, fried fennel, dried ginger, cinnamon and monkshood are used as auxiliary materials. The composition is a complete prescription, and has the effects of promoting Qi circulation and relieving depression, clearing heat, removing dampness, dispelling wind, and promoting blood circulation to remove blood stasis. The preparation method of the composition is simple and convenient, and the obtained finished product is stable in dosage form and convenient to take.