The invention belongs to the technical field of traditional Chinese medicine, and discloses a traditional Chinese medicine shampoo powder for removing scurf, relieving itch and preventing hair loss and its preparation method. The traditional Chinese medicine shampoo powder is prepared from, by weight, 20-30 parts of tea seed, 25-30 parts of saponin, 10-15 parts of cortex dictamni, 15-20 parts of radix sophorae flavescentis, 20-25 parts of radix polygoni multiflori, 15-20 parts of golden cypress, 10-15 parts of radix rehmanniae, 5-15 parts of rhizoma atractylodis, 15-30 parts of Cacumen biotae, 10-15 parts of Ligusticum wallichii, 10-15 parts of mint, 10-15 parts of chrysanthemum, 7-15 parts of semen boitae, 10-20 parts of fructus crataegi, 10-15 parts of folium artemisiae argyi, 8-15 parts of Schisandra chinensis, 10-13 parts of Salvia miltiorrhiza, 10-12 parts of Codonopsis pilosula, 12-15 parts of plantain herb, 15-20 parts of Angelica sinensis, 15-18 parts of moutan bark, 15-25 parts of Astragalus membranaceus, 10-15 parts of fructus aurantii, 15-20 parts of cortex mori, 10-12 parts of fructus kochiae, 10-12 parts of common cnidium fruit, 5-10 parts of honeysuckle, 10-15 parts of wild chrysanthemum flower, 15-20 parts of herba violae, 10-15 parts of radix stemonae, 15-25 parts of tribulusterrestris, and 15-25 parts of wild pepper. The traditional Chinese medicine shampoo powder has the advantages of relieving rheumatic pain and invigorating the circulation of blood, dredging the channels, nourishing blood and nourishing hair, preventing allergic, sterilizing and decontaminating.