The invention discloses a traditional Chinese medicinal composition for treating alcoholic fatty liver and a preparation method thereof. The traditional medicinal composition contains the following raw materials of: by weight, 15-35 parts of Artemisia capillaries, 15-30 parts of Radix Puerariae, 15-35 parts of Poria cocos, 10-25 parts of couchgrass root, 10-25 parts of Herba Eupatorii, 10-25 parts of cassia seed, 4-10 parts of green tea, 5-12 parts of haw, 5-12 parts of red sage root, 5-12 parts of sweet wormwood, 5-12 parts of cortex lycii, 8-15 parts of burdock, 4-10 parts of Caulis Bambusae In Taeniam, 4-10 parts of polygonatum rhizome, 4-10 parts of ligustrum lucidum, 4-10 parts of Ligusticum wallichii and 2-8 parts of licorice. The traditional Chinese medicinal composition can be made into any clinically acceptable oral medicinal preparation including pill, particulate agent, capsules or tablet and the like. It shows through clinical observation result that the traditional Chinese medicinal composition has substantial curative effects for alcoholic fatty liver. Safety observation indicates that the traditional Chinese medicinal composition is safe in clinic usage and has no toxic and side effect.