The invention discloses a traditional Chinese medicine used for treating bone injury, postoperative bone nonunion and delayed union and a preparation method thereof. The invention consists of twenty six traditional Chinese medicines of frankincense, hemlock parsley, cassia twig, myrrh, angelica, rhizoma corydalis, safflower, fossil bone, rhizoma drynariae, elecampane, eucommia bark, dipsacus asperoides, Chinese goldthread, mirabilite, ground beetle, earthworm, DiFeng, Chinese fresh-water crab, oyster, rhubarb, pseudoginseng, borneol, pearl, muskiness, dragon's blood and tiger bone. The invention has good curative effect for the patients with bone injury and fracture nonunion.