The invention discloses traditional Chinese medicine compound fermentation powder and a preparation method thereof. The formula contains the raw materials in parts by weight: 1-5 parts of compound decomposition enzyme, 10-50 parts of natto, 10-50 parts of codonopsis pilosula extract, 50-100 parts of phellodendron amurense extract, 20-70 parts of bitter melons, 50-120 parts of hippophae rhamnoides, 50-120 parts of cherries, 50-120 parts strawberries, 50-120 parts litchi, 50-120 parts of chaenomeles lagenaria and 50-120 parts of spinach. The preparation method comprises the steps: weighing the hippophae rhamnoides, which are fresh, plump, non-qualitative-change and 60-70%-ripe, the bitter melons, the cherries, the strawberries, the litchi, the chaenomeles lagenaria and the spinach, carrying out cleaning, sterilizing, peeling, denucleating and dicing, and putting the dices into a fermentation tank; adding the natto, the codonopsis pilosula extract, the phellodendron amurense extract and the compound decomposition enzyme into the fermentation tank, and adding pure water and honey into the fermentation tank; carrying out fermentation for 7-14 days in the fermentation tank; filtrating fermentation liquor, and filtrating the filtrate again, thereby obtaining a traditional Chinese medicine compound enzyme. According to the traditional Chinese medicine compound fermentation powder and the preparation method thereof, the operation is simple and convenient, effective ingredients of various components can be reserved, the traditional Chinese medicine compound fermentation powder is suitable for being drunk by patients suffering from type 2 diabetes daily and is used for assisting blood sugar improvement, and large-scale production is facilitated.