The invention provides medicine paste with functions of diminishing inflammation, relieving pain, activating blood circulation and dissipating blood stasis and a manufacturing method thereof. The mashed medicine comprises the following components: herb of decumbent bugle, ovalleaf dutchmanspipe root, stem of climbing entada, kadsura coccinea, stem of glaucescent diploclisia, pawpaw, dog bone, giant knotweed rhizome, rhizome of blackfruit greenbrier, rhizoma drynariae, herb of chrysanthemum-like groundsel, air plant, leaves of fig, peach kernel, saffron, sanguis draxonis, elderberry, native copper, the bark of eucommia, radix achyranthis bidentatae, himalayan teasel root, rhizoma ligustici wallichii, edible bird's nest, angelica, clematis root, cassia twigs, olibanum and myrrh. The manufacturing method comprises the following steps of: removing impurities from above traditional Chinese medicines, cutting up, and uniformly mixing according to the proportion, drying in the shade or sun, and then grinding into powders; filling the traditional Chinese medicine powders into wine to be soaked for about 3 months; and in use, mixing the medicine with flour and then externally applying the medicine paste on the wound parts. The manufacturing method of the medicine paste is simple, the components of the traditional Chinese medicine are not broken, and the medicine paste is easy to pack and save with long guarantee period. The invention is suitable for various acute or chronic muscle injury, bone muscle injury and joint injury.