The invention discloses a composition for improving insomnia and a preparation method thereof; the composition comprises, by weight, nacre, fleeceflower stem, largehead atractylodes rhizome, wild jujube seed, Chinese angelica root, tuckahoe, Chinese thorowax root, licorice root, cape jasmine fruit, fiveleaf akebia root, dwarf lilyturf root, membranous milkvetch root, longan pulp, oyster, lily bulb, silktree albizia bark, wolfberry fruit, Chinese arborvitae seed, divaricate saposhnikovia root, villous amomum fruit, shorthorned epimedium herb, dried orange peel, tabasheer, common anemarrhena rhizome, green tangerine peel, nutgrass galingale rhizome, peach seed, white mulberry bark, betelnutpalm pericarp, common perilla fruit, multiprickle acanthopanax root, plumule of hindu lotus, weeping forsythia fruit, swordlike atractylodes rhizome, largetrifoliolious bugbane rhizome, cassia bark, medicinal evodia fruit, Japanese pagodatree fruit, Chinese gall, desertliving cistanche herb, rose flower, immature flower of silktree albizia, Indian bread with hostwood, dragon's teeth, immature bitter orange, culm medium of Chinese tuldoide bamboo, rough gentian root, Chinese magnoliavine fruit, Siberian solomonseal rhizome, sickle senna seed, white mulberry fruit, stem pith of common rush, common selfheal spike, endothelium of chicken's gizzard and Java amomum fruit. the preparation method comprises the steps of uniformly mixing the components to prepare pills, decoctions, powders or oral liquids. The composition is suitable for insomnia caused by various reasons and has a better improvementeffect.