The invention relates to externally-used traditional Chinese medicine ointment for treating psoriasis and a preparation method of the externally-used traditional Chinese medicine ointment which is prepared from various traditional chinese medicinal materials, can quickly treat various types of psoriasis and is non-irritating. The externally-used traditional Chinese medicine ointment is prepared from raw materials in parts by weight as follows: 15-45 parts of walnut peels, 500-800 parts of walnut kernels, 35-70 parts of dandelions, 25-50 parts of humifuse euphorbia herbs, 12-25 parts of egg yolks, 800-1,000 parts of mutton tallow, 35-50 parts of llex cornuta Lindl., 15-35 parts of willow leaves, 12-25 parts of acanthopanax senticosus, 20-40 parts of common cnidium fruits, 15-30 parts of realgar, 15-35 parts of frankincense, 200-300 parts of albolene, 35-50 parts of wrinkled gianthyssop herbs and 20-35 parts of apricot leaves. The externally-used traditional Chinese medicine ointment has the functions of inhibiting activity of toxin cells, controlling synthesis and breeding of pathological cells and promoting recovery of metabolism of epidermic cells, can eliminate inflammation, relive pain, activate blood, remove stasis, remove meridian stasis, promote resuscitation and permeate into bones, can be used for treating various types of psoriasis, and has the advantages that the ointment is convenient to use and takes effect quickly, the treatment course is short, and the curative effect is remarkable.