The invention relates to a traditional Chinese medicine composition for treating insomnia. The traditional Chinese medicine composition is prepared from the following raw materials in parts by weight: 1-5 parts of coptis chinensis, 7-11 parts of fructus psoraleae, 7-11 parts of folium artemisiae argyi, 1-5 parts of safflower, 14-21 parts of fleshfingered citron flower, 7-11 parts of folium mori, 1-5 parts of cinnamon, 7-11 parts of cardamom, 7-11 parts of rose, 7-11 parts of radix angelicae and 7-11 parts of mint. The invention further provides application of the traditional Chinese medicine composition. The compress bag has the curative effect of hot compress, the traditional Chinese medicine composition serves as a pillow to be cushioned under the neck of a patient, medicine fragrance emitted by the traditional Chinese medicine composition helps the patient to relax and fall asleep, and the compress bag is suitable for symptoms such as insomnia and dreaminess, restless mood, dizziness, weakness and tiredness, cold hands and feet, cold shape and cold limbs and the like.