The invention provides traumatic injury and fracture healing ointment. The traumatic injury and fracture healing ointment comprises lindera aggregate, cinnamon, panax notoginseng, raw kusnezoff monkshood roots, crude sichuan aconite roots, squama manis, eucommia, papaya, teasel roots, drynaria total flavonoids, angelica pubescens, common clubmoss herbs, forged pyritum, resina draconis, agilawood, olibanum, safflowers, ground beetles, angelica sinensis, rhubarb, fried red lead and tung oil. The method for preparing the traumatic injury and fracture healing ointment includes the steps that first, block materials in the formula are all ground into fine powder; second, the tung oil is heated to be at 80 DEG C; third, the lindera aggregate, the cinnamon, panax notoginseng, the raw kusnezoff monkshood roots, the crude sichuan aconite roots, the squama manis, the eucommia, the papaya, the teasel roots, the drynaria total flavonoids, the angelica pubescens, the common clubmoss herbs and the forged pyritum are placed into the tung oil, stirred and heated until the oil temperature reaches 300 DEG C; fourth, the resina draconis, the agilawood, the olibanum, the safflowers, the ground beetles, the angelica sinensis and the rhubarb are added, stirred and heated; fifth, the fried red lead is scattered, stirred and heated to be boiled, and the traumatic injury and fracture healing ointment is obtained. When used, the ointment is burnt and melted through low fire, and then is spread on a piece of starched ointment cloth to be applied to an affected part. The traumatic injury and fracture healing ointment has the functions of promoting facture healing, relieving swelling and pains, activating blood circulation and removing stasis, and repairing damaged bone tissue.