Disclosed are skin wound treating ointment and a preparation method thereof. Raw materials of the skin wound treating ointment include scrophularia ningpoensis, raw radix astragalis, goldthread, almond, Chinese angelica, radix angelicae, cortex cinnamomi, Chinese rhubarb, roots of rehmannia, costustoot, golden cypress, roots of common peony, nidus vespae, snake slough, carbonized hair, olibanum, myrrh, colophony, alums and beeswax. The preparation method includes following steps (1), frying: pouring herb into a pan, heating the herb by castor seed oil at first, pouring the herb from the pan, removing slag of the herb, then pouring the nidus vespae, the snake slough and the carbonized hair into the pan to be heated, pouring the nidus vespae, the snake slough and the carbonized hair out of the pan, and removing slag of the nidus vespae, the snake slough and the carbonized hair, and (2) adding medicines and butyl stearate which do not need to be fried by oil: and adding the olibanum, themyrrh, the colophony, the alums and the beeswax which are crushed finely. The skin wound treating ointment is traditional Chinese medicine preparation, each gram of the ointment contains 0.5 gram of original medicine extractives, and the skin wound treating ointment has effects of 'detoxication, bind dissipation, necrotic tissue eliminating, granulation promoting, inflammation diminishing, pain relieving, blood circulation promoting and blood stasis removing, is clinically used for treating postoperation poor incision healing, burning, poor wound healing and failed muscle growth, and particularly has an excellent skin-grafting effect for burns, scalds, wound and fester.