The invention belongs to the field of traditional Chinese medicines, and discloses an externally used plaster for treating knee bursitis, and a making method thereof. The externally used plaster comprises Dioscorea nipponica Makino, Ventilago leiocarpa, Lycopodium japonicum Thunb, glabrous sarcandra herb, MarSdenia sinensis Hemsl, Gynura pseudochina, Salvia chinensis Benth., root or bark of Fragrant heteropanax, peach blossom, Radix Curcumae Aromaticae, Tetrastigma hemsleyanum Diels et Gilg, Conyza japonica, Arisaema Cum Bile, Radix Stephaniae Tetrandrae, clam shell, oriental stephania root, Asarum longiflorum C. Y. Chenget C. S. Yang., Sarmentose Pepper Herb, cinnamon, licorice root, goral fat, maifan stone, laurocapram, squalane, propolis, menthol, olive oil, chamomile essential oil and dicyano isobutyl acrylate. The externally used plaster has mild medicinal property and refreshing smell, has muscle tendon relaxing, collateral activating, blood circulation invigorating, blood stasis dissolving, wind dispelling, phlegm reducing, meridian warming and coldness dispelling effects to make tissue blood circulation be smooth, phlegm and stasis eliminated, muscles and pluses be nourished and joints be smooth, can effectively treat knee bursitis, has no secondary damages to synovial bursa, and has very good clinic curative effects.