The invention discloses a Chinese medicinal composition for dispelling scars. The composition is prepared from oral administration medicaments and externally-applied medicaments, wherein the oral administration medicaments comprise but are not limited to the following raw material medicaments: angelica dahurica, peach seed, largehead atractylodes rhizome, job stears, Chinese angelica, Szechuan lovage rhizome, dipsacus asperoides, glabrous sarcandra herb, achyranthes root, earthworm, ground beetle, codonopsis pilosula, rhizoma drynariae, williams elder twig and white paeony root; and the externally-applied medicaments comprise but are not limited to the following raw material medicaments: dragon's blood, myrrh, safflower, Chinese angelica, suberect spatholobus stem, rose mallow root, pseudoginseng root, dipsacus asperoides, spreading hedyotis herb, frank incense, angelica dahurica, pearl, root of red-rooted salvia, williams elder twig, loofah sponge, rose and cortex moutan. The Chinesemedicinal composition is used for treating various burn scares and various scars formed after surgery and trauma and has the effects of activating blood and dissolving stasis, relaxing tendons and activating collaterals, detoxicating and diminishing swelling, softening hardness to dissipate stagnation, inhibiting scar hyperplasia, relieving scar itching, and softening the scars.