The invention relates to a traditional Chinese medicine for treating skin diseases and a preparation method thereof. The traditional Chinese medicine is prepared from the following raw materials by weight: scorpio, centipede, myrrh, frankincense, the bulb of fritillary, coptis chinensis, radix angelicae, divaricate saposhnikovia root, gypsum, rhizoma atractylodis, safflower, lumbricus, curcuma zedoary, scutellaria baicalensis, cortex phellodendri, dittany bark, stiff silkworm, pollen, cape jasmine, radix scrophulariae, radix scrophulariae, fructus forsythia, cornu bubali and the like by virtueof a grinding manner. The traditional Chinese medicine disclosed by the invention has the advantages that the traditional Chinese medicine is prepared by grinding the multiple traditional Chinese medicines including the scorpio, centipede, myrrh, frankincense, the bulb of fritillary, coptis chinensis, radix angelicae, divaricate saposhnikovia root, gypsum, rhizoma atractylodis, safflower, lumbricus, curcuma zedoary, scutellaria baicalensis, cortex phellodendri and the like, has obvious curative effects on skin diseases such as leucoderma, psoriasis, herpes zoster, dermatitis, epifolliculitis,eczema and the like, has excellent treatment effects on symptoms including cervical spondylosis, prolapse of lumbar intervertebral disc, osteoproliferation, varicosity, bone effusion and the like, issimple in preparation and high in generalizability, and has high social benefits and medical benefits.