The invention relates to a medicine for curing hyperthyroidism and a method of preparing the medicine. The medicine is composed of 10 to 40 portion of fresh yam, 10 to 40 portion of raw oyster, 10 to 40 portion of fortune's drynaria rhizome, 10 to 40 portion of milkvetch root, 10 to 40 portion of pumice, 10 to 40 portion of climbing groundsel herb, 10 to 40 portion of spicaprunellae, 10 to 40 portion of sargassum, 10 to 40 portion of thallus eckloniae, 10 to 40 portion of white mustard seed, 5 to 20 portion of thunberg fritillary bulb, 5 to 20 portion of tuber pinelliak, 5 to 20 portion of angelica, 5 to 20 portion of ampelopsis japonica, 5 to 20 portion of pipewort, 5 to 20 portion of tangshen, 5 to 20 portion of trigone, 5 to 20 portion of rhizoma zedoariae, 2 to 8 portion of cyclophosphamide and 0.3 to 1 portion of tapazole by the weight percent, which are processed through a series of procedures, including medicine selection, drying arrow crushing, sifting arrow sterilization arrow preparation and packaging. The invention is characterized by quick effect, short period of treatment, high therapeutic effect, little toxicity and side effect, convenience in being taken and prevention of recurrence, etc.