The invention discloses a multifunctional medicinal pillow and a preparation method thereof. The multifunctional medicinal pillow is prepared from proanthocyanidins, astragalus, codonopsis pilosula, Chinese wolfberry, Chinese angelica, epimedium herb, processed fleece-flower root, polygonum multiflorum, cistanche deserticola, himalayan teasel root, safflower, cinnamon, white paeony root, eucommia, cattail pollen, angelica dahurica, motherwort fruit, thinleaf milkwort rootbark, magnetite, tourmaline, rosemary, osmanthus fragrans and rose. The multifunctional medicinal pillow has the effects ofremoving free radicals, tonifying qi and tonifying spleen, nourishing liver and kidney, invigorating the circulation of blood and enriching the blood, warming meridians and relieving pain, clearing and activating the channels and collaterals, dispelling wind and eliminating dampness, soothing the liver and regulating vital energy, resisting aging, improving an immunologic function, and promoting reproductive organs to develop. The multifunctional medicinal pillow is applicable to health care and treatment of impotence, premature ejaculation, cold wombs, dysmenorrhea, abnormal menstruation, frigidity, vaginal relaxation, micromazia, chloasma, hypertension, hyperlipaemia, insomnia, cervical spondylosis, scapulohumeral periarthritis and other diseases and has an anti-aging effect. The multifunctional medicinal pillow integrates the effects of magnet therapy, far infrared, negative oxide ions and Chinese medicinal essence, can treat different diseases simultaneously during sleeping, has agood curative effect, and a wide application range, does not have toxic or side effect, and is aromatic and pleasant, convenient to use, and low in cost.