The invention discloses a traditional Chinese medicine formula for reducing hair loss and turning white hair into black hair by adjusting circulating metabolism and nutrient supply of the scalp and a preparation method thereof. The formula comprises fructus lycii, semen cuscutae, fructus rubi, fructus schizandrae, semen plantaginis, radix ginseng, rhizoma atractylodis macrocephalae, poria cocos, licorice root, radix angelicae sinensis, rhizoma ligusticum wallichii, radix rehmanniae preparata, radix paeoniae alba, radix salviae miltiorrhizae, flos carthami, peach kernels, lignum sappan, rhizoma gastrodiae, radix saposhnikoviae, caulis polygoni multiflori, mulberry leaves, mint, radix plygoni multiflori, caulis lonicerae, cortex moutan, cacumen biotae, cortex lycii radicis and radix scrophulariae. By using the formula, while the effects of replenishing vital essence and blood, expelling wind evil, dissipating blood stasis and clearing away heat are achieved, the blood circulation can be promoted to dredge the meridians, nutrients are replenished to hair roots, and the blood microcirculation of the head is adjusted. The materials are selected according to the formula, an extraction solution is prepared and directly applied to the hair, or the extraction solution prepared by means of the formula serves as a main raw material to be prepared into shampoo or hair-nourishing cream, through transdermal medicine administration, the white hair can be quickly turned into the black hair, and the symptoms of hair loss and dryness can be effectively eliminated; moreover, no toxic or side effect is caused to the human body.