The invention relates to a traditional Chinese medicine for treating lipoma disease, which is used for effectively solving the problems such as medication for treating lipoma and improvement of treatment effect. The traditional Chinese medicine is prepared from the following bulk drugs by weight: 25-35g of angelica, 25-35g of lychee seed, 40-50g of prepared nutgrass galingale rhizome, 25-35g of zedoary, 25-35g of bupleurum root, 25-35g of rhizoma corydalis, 25-35g of frankincense, 25-35g of tangerine seed, 25-35g of rhizoma chuanxiong, 25-35g of prepared myrrh, 25-35g of fried cowherb seed, 25-35g of trogopterus dung, 25-35g of rhizoma cimicifugae and 25-35g of platycodon root. The preparation method of the traditional Chinese medicine comprises the following steps: crushing the angelica,the lychee seed, the prepared nutgrass galingale rhizome, the zedoary, the bupleurum root, the fried cowherb seed, the trogopterus dung, the rhizoma cimicifugae and the platycodon root, sieving with a 300 mesh sieve, and evenly mixing to obtain fine powder; mixing the rhizoma corydalis, the frankincense, the tangerine seed, the rhizoma chuanxiong and the prepared myrrh, decocting with 6-8-fold water twice (1.5hours every time), mixing the obtained decoctions, and concentrating the mixed decoction into extract with relative density of 1.20-1.30 at the temperature of 50 DEG C; and mixing the fine powder with the extract to form a medicinal lump, preparing the medicinal lump into pills, drying, coating and sub-packaging to finally obtain the traditional Chinese medicine. The traditional Chinese medicine has the advantages of rich raw materials, scientific and reasonable formula, low cost and good curative effect and is easy to produce, thus the traditional Chinese medicine can be used for effectively treating the lipoma so as to benefit the society.