The invention discloses traditional Chinese medicine oil, which is mainly used for treating burn, scald or acute and chronic ulcer sore surface, surgical skin diseases, genital organ inflammation or abrasion and laceration of body surfaces. The traditional Chinese medicine oil comprises the following components by weight percent: 2-5% of polygonum cuspidatum, 0.5-2% of rhubarb, 0.5-2% of radix scutellariae, 0.5-2% of coptis root, 1-2.5% of fructus forsythiae, 1-2.5% of honeysuckle flower, 1-4% of radix angelicae, 1-3% of angelica, 1-2% of beautyberry, 0.5-2% of fresh and live centipede, 0.5-2% of earthworm, 0.5-1.5% of borneol, 0.3-2.5% of phellodendron bark, 1-2% of cortex dictamni, 1-2% of belvedere fruit, 0.5-2% of frankincense, 0.5-2% of myrrh, 1-2% of lithospermum and 57-85.7% of rapeseed oil. The invention also discloses a preparation method of the traditional Chinese medicine oil. The traditional Chinese medicine oil disclosed by the invention can relieve pain of patients, clear away heat and toxic materials, alleviate pain and eliminate swelling, eliminate dampness, remove rot and relieve itching, as well as activate blood, moisten skin and promote tissue regeneration within the shortest time, can quickly promote forming and falling of scab film, and has no toxic or side effect.