The invention discloses a capsule for remedying peptic ulcer and a preparation method thereof. The capsule takes Chinese medicinal plants of astragalus, white peony root, angelica, cassia twig, cuttlebone, fritillary bulb, siphonostegia chinensis, coptis chinensis, liquorices and so on as raw materials. The cuttlebone is crushed. The volatile oil is extracted from angelica, cassia twig and siphonostegia chinensis. The volatile oil is packed by beta-cylodextrin. The astragalus is extracted by water. The white peony root, fritillary bulb, coptis chinensis and liquorices are extracted by alcohol. The extracting solutions is made into fine power after being condensed and processed by spray drying. The capsule is made by publicly known capsule technology and the weight of each capsule is 0.3g. The capsule has efficacy of nourishing the essential Qi, warning the stomach, inhibiting acid, stopping pain, activating blood, remedying ulcer and preventing recurrence. The capsule mainly cures peptic ulcer of deficiency cold of spleen and stomach type, and the symptoms of the disease are that the stomach is pain and is indulging in warm and press or pains at night with pantothenic acid and vomiting bitter.