The invention discloses a traditional Chinese medicine composition for treating subacute thyroiditis. The composition is a preparation prepared from the following raw materials by weight: 15-30 parts of hedyotis diffusa, 9-15 parts of honeysuckle, 15-30 parts of dandelion, 15-30 parts of Chinese violet, 9-15 parts of root of common peony, 9-15 parts of radix scrophulariae, 9-15 parts of peach kernel, 9-15 parts of baked turtle shell and 15-30 parts of sweet wormwood. According to clinical study on the treatment of subacute thyroiditis, the traditional Chinese medicine composition provided by the invention has total effective rate of 93.34%, which is significantly better than 73.33% of a prednisone group, and can effectively reduce erythrocyte sedimentation rate and CRP of subacute thyroiditis patients, and effectively improve clinical symptoms of the patients; although the cooling time, improvement time of neck pain and regression time of neck tenderness are longer than those of the prednisone group, the goiter or nodule disappearance time shows no obvious difference from those of the prednisone group; relapse rate after drug withdrawal is 3.33%, which is significantly lower than 20% of the prednisone group; and the composition has little adverse reaction, which is significantly lower than that of the prednisone group. The invention also discloses a preparation method of the traditional Chinese medicine composition granules.