The invention relates to an externally-applied traditional Chinese medicine preparation for accelerating healing of chronic skin ulcer wounds and a preparation method thereof. According to the preparation, root of angelica sinensis(oliv.)diels, frankincense, commiphora myrrha engl.[c.molmol engl.], daemonorops draco blume., flower of carthamus tinctorius l. and dried body of eupolyphaga sinensis walker are used as monarch drugs capable of promoting blood circulation, removing obstruction in collaterals and relieving pain; unprocessed rehmannia root, root of paeonia veitchii lynch, root of scrophularia ningpoensis hemsl., root of rheum palmatum L. and root of lithospermum erythrorhizon sieb.et zucc. are used as ministerial drugs capable of cooling blood, relieving pain, detoxifying, and reinforcing the pain relieving effects of the monarch drugs; root of sophora flavescens ait. and cortex of phellodendron chinense Schneid. are capable of clearing heat and drying dampness; root of angelica dahurica (Fisch.ex Hoffm.) Benth.et Hook.f., root of notopterygium incisum ting ex h.t.chang and angelica pubescens Maxim.f.biserrata Shan et Yuan have the effects of dispelling wind and eliminating dampness; the root of sophora flavescens ait., the cortex of phellodendron chinense schneid., the root of angelica dahurica(Fisch.ex Hoffm.) Benth.et Hook.f., the root ofnotopterygium incisum tingex h.t.chang and the root of angelica pubescens Maxim.f.biserrata Shan et Yuan can cooperate with one another to remove damp heat toxin and fire toxin formed when circulation of qi and blood is unsmooth and qi and blood overflow outside veins due to stasis and blockage of blood vessels; the damp heat toxin and fire toxin are accumulated subcutaneously to form lumps; tuber of ampelopsis japonica(Thunb.)Makino, momordica cochinchinensis(Lour.)Spreng. and forsythia suspensa(thunb.)vahl are used to assist in clearing heat, removing stasis and diminishing swelling; the sophora flavescens ait., thephellodendron chinense schneid., the angelica dahurica(fisch.ex hoffm.)benth.et hook.f., the notopterygium incisum ting ex h.t.chang, angelica pubescens maxim.f.biserrata shan et yuan, the ampelopsisjaponica(thunb.)makino, seed of momordica cochinchinensis(Lour.)Spreng. and fruit of forsythia suspensa(Thunb.)Vahl are jointly used as adjuvant drugs; cinnamomum cassia presl, tuber of lindera aggregata(Sims)Kosterm. and borneol are capable of inducing menstruation to relieve menalgia and reinforcing the pain relieving effects of the monarch drugs; bletilla striata(Thunb.)Reichb.f. is capable ofdiminishing swelling and promoting granulation; the cinnamomum cassia presl, the lindera aggregata(sims)kosterm., the borneol and the rhizome of bletilla striata(Thunb.)Reichb.f. are jointly used as envoy drugs. Through treatment and follow-up on multiple patients with diabetic foot gangrene and decubital ulcer, the total effective rate is 100%.