The invention discloses a Chinese medicament for treating femoral head necrosis and a preparation method thereof. The Chinese medicament comprises the following raw materials by weight: 187.5 grams of fortune's drynaria rhizome, 250 grams of astragalus, 187.5 grams of himalayan teasel root, 125 grams of ground beeltle, 187.5 grams of epimedium brevicornum, 125 grams of medicinal indianmulberry root, 125 grams of south dodder seed, 250 grams of root of red-rooted salvia, 187.5 grams of Chinese flowering quince, 125 grams of szechuan lovage rhizome, 125 grams of large-headed atractylodes rhizome, 125 grams of Indian buead, 187.5 grams of cassia twig, 250 grams of glabrous greenbrier rhizome, 125 grams of white paeony root, 125 grams of villous amomum fruit, 187.5 grams of pubescent angelica root, 125 grams of clematis root, 187.5 grams of chicken's gizzard-membrane, 25 grams of manchurian wildginger, 187.5 grams of yanhusuo, 27.8 grams of pyrite, 41.7 grams of frankincense and 41.7 grams of myrrh. The preparation method comprises the following steps of: 1, pulverizing the weight part of the raw materials into fine powder for later use; 2, immersing the fine powder in water, and refluxing to extract essential oil; 3, after mixing the essential oil and decoction dregs, decocting the mixture in the water to obtain filter liquor, merging the filter liquor and the distilled aqueous solution, and performing concentration until clear ointment is generated for later use; and 4, mixing cane sugar and the fine powder, the clear ointment and the essential oil fully and uniformly to obtain soft extract products. The Chinese medicament is prepared from the Chinese medicinal raw materials, and has outstanding curative effect, definite action and obvious clinical effect.