The invention relates to a traditional Chinese medicine reducing liquid (paste) for treating scars. The traditional Chinese medicine reducing liquid (paste) is prepared from the following raw materials: Chinese thorowax roots, radix curcumae, radix codonopsis, poria cocos, rhizoma chuanxiong, prepared rehmannia roots, white peony roots, fructus lycii, largehead atractylodes rhizomes, malt, hawthorn fruits, medicated leaven, pueraria lobata, divaricate saposhnikovia roots, cassia twigs, red peony roots, milkvetch roots, oriental waterplantain rhizomes, licorice roots, American ginseng, ganoderma lucidum, corn stigma, panax notoginseng, pangolins, brucea javanica, bombyx batryticatus, frankincense, myrrh, bletilla striata, gentiana scabra, turberculate speranskia herbs and pearls. The traditional Chinese medicine reducing liquid (paste) has natural components without toxic or side effects, treats both symptoms and root causes, contains no added hormone medicines, is nonirritating to skin, can be applied to people with various skin types at different ages and can effectively treat the scars.