The invention relates to a pharmaceutical composition for treating ringworm of the nails and process for preparation, wherein the composition is prepared from pangolin scales, musk, clove, banksia rose, Cinnamomum cassia, cortex pseudolaricis, flavescent sophora root, roor of sessile stemona, Chinese dittany bark, hydnocarpus seed, pricklyash peel, Chinese honey locust, cicada shell, dragon's bone, jack-in-the-pulpit tuber, pinellia tuber, Sichuan aconite root, Kusnezoff monkshood root, camphor, lead monoxide, Halitum Violaceoum, red lead, momordica seed, 2-hydroxybenzoic acid and benzene carboxylic acid through steps of powdering, heating, fermenting and mixing the powders with 2-hydroxybenzoic acid and benzene carbonic acid.