The invention relates to medicinal liquor for reducing the swelling and relieving pain, in particular to medicinal liquor which is externally used, prepared from raw material medicines of Chinese herbal medicines and used for treating swelling and pain caused by traumatic injury, and a preparation method of the medicinal liquor. The medicinal liquor consists of the following raw material medicinesof 20 grams of frankincense, 20 grams of myrrh, 15 grams of boston ivy, 20 grams of Pseudo-ginseng, 15 grams of tree peony bark, 15 grams of mulberry twigs, 20 grams of safflowers, 8 grams of honeysuckle flowers, 12 grams of radix salviae miltiorrhizae, 15 grams of codonacanthus pauciflorus, 15 grams of hirsute shiny bugleweed herbs, 10 grams of sinapis alba, 12 grams of cowherb seeds, 12 grams of peach kernels, 15 grams of dandelions, 7 grams of dried ginger, 5 grams of musk, 8 grams of camphor, 10 grams of speranskia herbs, 10 grams of radix angelicae, 15 grams of radix angelicae pubescentis and 20 grams of radix angelica sinensis. The preparation method comprises the steps of removing impurities from the raw material medicines, performing drying in sunshine, performing crushing, performing loading into a container, adding 1000 grams of Baijiu of 60 vol, performing sealing for 7 days, and filtering off medicine dregs for standby application. The medicinal liquor has the effects andefficacy of clearing and activating the channels and collaterals, dispelling the wind, removing dampness, promoting blood circulation for removing blood stasis, reducing the swelling, promoting tissueregeneration, diminishing inflammation, alleviating pain, removing blood stasis and relieving pain.