The invention relates to a medicament for treating fractures and a preparation method thereof. The medicament comprises a bone-knitting plaster, a bone-knitting powder and a bone-knitting capsule, wherein the bone-knitting plaster comprises frankincense, myrrh, radix clematidis, red-rooted salvia roots, sesame oil, yellow lead, and the like; the bone-knitting powder comprises raidx astragali, Chinese angelica, licorice roots, Xueye, and the like; and the bone-knitting capsule comprises radix bupleuri, red peony, dipsacus asperoides, peach kernels, and the like. When in use, the bone-knitting plaster is used together with the bone-knitting powder or the bone-knitting capsule. The medicament can effectively treat fractures, bone joint dislocations, intervertebral disc protrusions and hyperosteogeny and have obvious treatment effect and high cure rate on symptoms such as delayedunions, nonunions, and the like. The medicament has no toxic or side effects, can be taken by both adults and children, is simple and convenient to operate and use, can be widely applied to various types of fractures and external wounds of different parts at different ages and is popular for patients.