The invention provides a Chinese medicament for treating atrophic gastritis and a preparation method thereof, and belongs to the technical field of Chinese medicament preparation. The Chinese medicament is prepared from natural Chinese herbal medicines as raw material prescription, and is characterized by comprising the following natural Chinese herbal medicines in parts by weight: 20 to 40 parts of astragalus mongholicus, 15 to 30 parts of raw rehmannia root, 10 to 20 parts of dwarf lilyturf tuber, 20 to 40 parts of white peony root, 10 to 20 parts of Chinese angelica, 8 to 16 parts of curcuma zedoary, 8 to 16 parts of corydalis tuber, and 3 to 6 parts of goldthread. Studies prove that the Chinese medicament has the functions of tonifying qi and nourishing yin, activating blood circulation to relieve pains, and treating chronic atrophic gastritis. The medicament has certain effects in improving symptoms, strengthening appetite, promoting digestion, relieving pains and the like, has no remarkable adverse response and high safety, is especially suitable for treating middle-aged and aged patients with chronic atrophic gastritis, and is rich in raw material sources and low in production cost, so that the economic burden of the patient can be greatly reduced by taking the medicament.