The invention discloses a Chinese herbal medicine liquid fertilizer and a preparation method and an application thereof. The method comprises the following steps: (1) a first mixing step, namely mixing ammonium nitrate, potassium dihydrogen phosphate, potassium nitrate and water to obtain a compound liquid A; (2) a second mixing step, namely mixing ferrous sulfate, copper sulfate, manganese sulfate, sodium molybdate, zinc sulfate, boric acid, cobalt chloride and water to obtain a compound liquid B; (3) a Chinese herbal medicine extraction liquid obtaining step, namely decocting immersed Chinese herbal medicines in water and concentrating the decocted mixture to obtain a Chinese herbal medicine extraction liquid; and (4) a third mixing step, namely mixing the Chinese herbal medicine extraction liquid, the compound liquid A, the compound liquid B and water, wherein the Chinese herbal medicines are cortex moutan, folium artemisiae argyi, honeysuckle, pepper, rhizoma atractylodis, mint, sweet-scented osmanthus, lavender, fresh gingers and aloe. The Chinese herbal medicine liquid fertilizer disclosed by the invention integrates the functions of providing nutrition, sterilizing and refreshing air to plant growth.