The invention discloses bandage for diminishing inflammation and stopping bleeding of an injury and a preparation method thereof. The bandage is prepared from the following main raw materials in parts by weight: 24-30 parts of polyurethane prepolymer, 4-7 parts of root of pseudo-ginseng, 8-12 parts of rhizoma typhonii, 4-8 parts of notopterygium root, 5-10 parts of dandelion, 10-13 parts of barberry root or stem, 6-9 parts of Radix Sanguisorbae, 8-11 parts of Japanese beauty-berry leaf, 5-10 parts of catechu, 6-9 parts of cacumen biotae, 10-14 parts of rhizoma bletillae and a proper amount of defoaming agent. The bandage has no toxic or side effect, good air permeability, strong moisture absorption, no negative stimulation on human bodies and excellent biocompatibility, has effects of stopping bleeding, sterilizing, diminishing inflammation, relieving pain, diminishing swelling, promoting granulation and the like, can be used for quickly stopping bleeding so as to relieve pains of patients, prevent muscle contraction and injury infection, accelerate healing and improve swelling. The bandage is convenient for movement of bones at the injury position, is beneficial to function recovery, is comfortable for patients, and is convenient to use.