The invention provides traditional Chinese medicine unguent warming yang, dredging collaterals, activating blood and stopping pain and a preparation method thereof. The traditional Chinese medicine unguent is prepared from coarse materials and fine materials, wherein the coarse materials comprise crude sichuan aconite roots, raw kusnezoff monkshood roots, epimedium, dry ginger, rhizoma chuanxiong, cistanche salsa, teasel roots, zedoary, zaocys dhumnade, angelica sinensis, long-noded pit viper, costus roots, artemisia anomala, corydalis tubers, morinda officinalis, rhizoma curcumae longae, drynaria rhizomes, Chaenomeles speciosa Nakai, curculigo orchioides, bark of eucommia, cherokee rose fruits, astragalus, seeds of Chinese dodder, rhizoma cibotii, rhizoma sparganii, gecko, parasitic loranthus, eucalyptus globulus labill, caulis spatholobi, smilax bockii warb, dysosma versipellis and paris polyphylla, and the fine materials comprise mastix, curnu cervi pantotrichum, musk, cinnamon, raw pinellia ternate, asarum, Chinese clematis, angelica roots, unprocessed rhizoma arisaematis, scorpio, peach kernels, Chinese Alangi, pseudo-ginseng, bornel, Chinese azalea flowers, datura metel, dragon's blood and myrrh. The traditional Chinese medicine unguent mainly has a very good treatment effect on lumbar dish outstanding, cervical spondylosis, periarthritis of shoulders, rheumatism, rheumatoid arthritis, hyperplasia, spur, limb numbness, ankylosing spondylitis, traumatic injuries, stroke hemiplegia and lumbar hernia.