The invention relates to the technical field of traditional Chinese medicines and in particular relates to ointment for treating rheumatism bone diseases and traumatic injuries and a preparation method thereof. The ointment is prepared from the following raw materials in parts by weight: 10 to 20 parts of rhizoma typhonii, 10 to 20 parts of caulis impatientis, 10 to 20 parts of radix polygonum multiflorum preparata, 10 to 20 parts of squama manis, 10 to 20 parts of flos carthami, 15 to 30 parts of radix ginseng, 20 to 40 parts of rhizoma drynariae, 20 to 40 parts of radix rehmanniae, 20 to 40parts of olibanum, 15 to 50 parts of radix cyathulae, 15 to 50 parts of rhizoma et radix notopterygii, 15 to 50 parts of rhizoma gastrodiae, 15 to 50 parts of rhizoma chuanxiong, 15 to 50 parts of zaocys dhumnade, 15 to 50 parts of ramulus mori, 15 to 50 parts of rhizoma corydalis, 15 to 50 parts of radix angelicae sinensis, 15 to 50 parts of herba menthae, 15 to 50 parts of borneol, 50 to 70 parts of radix notoginseng, 100 to 300 parts of ethylene glycol, 3,000 to 6,000 parts of sesame oil and 1,500 to 3,000 parts of yellow lead. The ointment has the effects of promoting blood circulation andremoving blood stasis and dispelling cold and relieving pain, and has a good curative effect on the rheumatism bone diseases and the traumatic injuries; the ointment has a rapid effect, a short treatment course and a high healing rate.