The invention relates to the technical field of traditional Chinese medicines, and discloses a Yiwangao ointment and a preparation method thereof. The Yiwangao ointment disclosed by the invention is prepared by decocting radix astragali, Chinese angelica, ground beetle, radix aconiti, radix aconiti kusnezoffii, cochinchina momordica seed, centipede, frankincense, myrrh, dragon's blood, yellow wax, minium and sesame oil. In the invention, multiple pure natural raw materials are selected as the components of the compound traditional Chinese medicine Yiwangao ointment; the Yiwangao ointment is prepared by decocting with a unique process, realizes a remarkably curative effect on curing symptoms such as angiitis, arteriosclerosis obliterans, diabetic foot, deep and shallow venous thrombus, venous ulcer, various bone diseases, lumbar disc herniation, gout, synovitis, stubborn dermatitis, malignant sore, burn, frostbite and the like, and has the advantages of convenience in use, low cost, remarkable curative effect and the like.