The invention discloses a traditional Chinese medicine for treating skeletal diseases and a processing method. The traditional Chinese medicine comprises semen brassicae, semen gynandropsis, semen strychni, unprocessed radix aconiti, unprocessed radix aconiti kusnezoffii, unprocessed rhizoma arisaematis, flos rhododendri mollis, notopterygium root, radix angelicae pubescentis, radix clematidis, radix angelicae dahuricae, rhizoma chuanxiong, olibanum, myrrh, ramulus cinnamomic, chinese blister beetle, borneol, camphor, radix angelicae sinensis, rhizoma corydalis and radix paeoniae rubra. The processing method comprises the steps of 1, pretreating the raw materials; 2, selecting raw materials; 3, performing low-temperature preservation; 4, grinding the medicinal materials into powder; and 5,packaging the medicinal powder. According to the method, a traditional Chinese medicine decocting procedure is avoided, traditional Chinese medicine preparation is adopted, rehabilitation of patientsis facilitated, the problems of cervical spondylosis, scapulohumeral periarthritis, lumbar disc herniation, hyperosteogeny, rheumatism, rheumatoid arthritis and the like are solved in an external application manner, and the effects of dispelling wind and eliminating dampness, promoting blood circulation to remove blood stasis, warming meridians to relieve pain, enriching blood and activating blood, menstruation regulating, pain relieving, heat clearing, blood cooling, stasis dissipating and pain relieving are achieved; and through the external application of the traditional Chinese medicine,the pain caused by an operation is reduced, and the medicinal effect is good.