The invention discloses a nerve-calming and sleep-aiding medicine pillow as well as a preparation method and application thereof. The nerve-calming and sleep-aiding medicine pillow comprises a pillowinner and a pillow case, a traditional Chinese medicine bag and a filler are arranged in the pillow inner, the filler is a mixture of buckwheat husk and cassia seed, and the traditional Chinese medicinal materials in the traditional Chinese medicine bag comprise 15-25 parts of cortex albiziae, 10-20 parts of poria with hostwood, 10-20 parts of tuber fleeceflower stem, 10-20 parts of silkworm excrement, 10-20 parts of spina date seed, 10-20 parts of salvia miltiorrhiza, 8-12 parts of wormwood, 8-12 parts of ligusticum wallichii, 8-12 parts of liquorice, 8-12 parts of polygala tenuifolia, 3-7 parts of rhizoma acori graminei, 3-7 parts of chrysanthemum, 3-7 parts of divaricate saposhnikovia root, 3-7 parts of platycodon grandiflorum, 3-7 parts of angelica dahurica, 3-7 parts of eucommia ulmoides, 3-7 parts of platycladi seeds and 3-7 parts of tortoise shells. The nerve-calming and sleep-aiding medicine pillow can relieve and improve the conditions of poor sleep quality, palpitation, easyconvulsion, dreaminess at night, depression, insomnia and cervical vertebra discomfort of a human body, and meanwhile, can eliminate diseases, strengthen the body and improve the immunity of the body.