The invention discloses an externally-used medicine for recovering a burned cortical tissue and a preparation method thereof. The externally-used medicine is prepared from the following raw materials in parts by weight: 3-8 parts of elephant skin, 10-15 parts of sulfur, 15-20 parts of sodium borate, 1-3 parts of borneol, 1-3 parts of musk, 20-30 parts of calamine, 20-30 parts of gypsum and 100-120 parts of sesame oil. The preparation method comprises the following steps: (1) putting the sulfur, the elephant skin, the sodium borate, the borneol, the calamine and the gypsum into a marmite, sealing the marmite by a porcelain bowl and totally sealing the joint of the porcelain bowl and the marmite with mud; (2) heating for half an hour by strong fire, subsequently heating for two hours by soft fire and cooling to room temperature; (3) opening the marmite, removing the medicine attached to the porcelain bowl, adding musk, uniformly mixing, grinding into powder and sieving by a sieve of which the size is 100 meshes to obtain medicine powder; (4) mixing the obtained medicine powder with the sesame oil according to a ratio of 1:20 to obtain an oily externally-used medicine for recovering the burned cortical tissue. The externally-used medicine disclosed by the invention has the advantages of being rapid in healing, good in treatment effect, capable of being used for recovering the burned cortical tissue and the like.