The invention discloses an external unguent for treating scald and burn and a preparation method thereof. The external unguent is prepared from the raw materials in parts by weight: 10-15 parts of Angelica sinensis, 8-12 parts of radix ampelopsis, 5-10 parts of rhizoma Atractylodis, 15-20 parts of garden burnet, 10-15 parts of dragon's blood, 14-18 parts of cortex albiziae, 15-20 parts of borneol, 12-16 parts of myrrh, 5-10 parts of frankincense, 10-15 parts of cottonrose hibiscus leaves, 16-22 parts of sunflower faceplate, 8-12 parts of radix angelicae, 20-25 parts of root of Dunn Antictrema, 13-19 parts of sunset abelmoschus flower, 5-10 parts of common sage herb, 12-16 parts of pine bark, 7-14 parts of dry tobacco, 13-17 parts of wild rice root, 10-15 parts of jujube bark, 100-150 parts of ginger juice, 80-120 parts of egg oil, 1500-2000 parts of sesame oil, 800-1200 parts of beewax and 200-300 parts of wool fat. Based on the scientific and reasonable matching of various traditional Chinese medicines, the external unguent disclosed by the invention has the effects of removing heat to cool blood, diminishing inflammation, killing bacteria, relieving swelling and pain, eliminating dampness, astringing sores, removing necrotic tissue, promoting granulation, repairing and regenerating skins and the like, so that the unguent disclosed by the invention cannot only keep the wounds of scald and burn dry to prevent drainage of massive seepage, but also can inhibit reproduction of bacteria to effectively prevent infection of wounds of scald, so as to promote fast repair of the wounds and eliminate scars.