The invention provides a traditional Chinese medicine composition for treating intercostal neuralgia and a preparation method of the traditional Chinese medicine composition. The traditional Chinese medicine comprises the following internal medicines in parts by weight: 10-20 parts of angelica sinensis, 10-20 parts of astragalus membranaceus, 10-20 parts of root of red-rooted salvia, 10-20 parts of peach kernel, 10-20 parts of flowers carthami, 10-20 parts of rhizoma cyperi, 10-20 parts of radix paeoniae alba, 10-20 parts of caulis spatholobi, 10-20 parts of ligusticum wallichii, 10-20 parts of radix rehmanniae preparata, 10-20 parts of citrus chirocarpus, 10-20 parts of curcuma zedoary, 10-20 parts of large-leaved gentian, 10-20 parts of radix bupleuri, 10-20 parts of radix curcumae and 10-20 parts of inula flower, and the following external medicines in parts by weight: 10-20 parts of caulis spatholobi, 10-20 parts of ligusticum wallichii, 10-20 parts of roots of common peony, 10-20 parts of radices sileris, 10-20 parts of rhizoma bletillae, 10-20 parts of radix angelicae, 10-20 parts of angelica sinensis, 10-20 parts of corydalis tuber, 10-20 parts of tenuifolia, 10-20 parts of roots of red-rooted salvia, 10-20 parts of radix clematidis, 10-20 parts of ground beeltle and10-20 parts of earthworm. The traditional Chinese medicine composition disclosed by the invention is reasonable in compatibility of medicines, and has strong and lasting anti-inflammatory action, the infectious and infectious inflammations can be restricted, congestion is relieved, the permeability of a blood capillary is reduced, reaction of inflammatory cells and the like is restricted, the function of phagocyte is restricted, a lysosome membrane is stabilized, alexin can be prevented from participating into inflammatory response, and tissue damage repair after inflammation is restricted.