The invention provides a Chinese medicine preparation for treating malignancy and a preparation method thereof. The preparation method comprises the following steps: firstly, pseudo-ginseng, Rhizoma Zedoariae, fritillariae thunbergii, Atractylodes macrocephala, edible tulip and Polyporus umbellate are dried and crushed into fine powder according to certain weight percent; secondly, Tephroseris kirilowii, Scutellaria barbata, Artemisia capillaries, radix astragali and liquorice with certain weight percent are added with water for decoction, a decoction solution is formed and filtered, and filtrate is decompressed and concentrated into condensed ointment; and thirdly, the fine powder and the condensed ointment are uniformly mixed, dried and crushed into fine powder which is then uniformly mixed and added with adequate water, so as to obtain the Chinese medicine preparation for treating the malignancy. The Chinese medicine preparation has obvious treatment effect on malignancy, particularly has obvious effects on preventing post-operation recurrence and metastasis and lightening the toxic side effect of chemicotherapy, is applicable to various cancer patients without untoward reaction and toxic side effect, relieves the symptoms and prolongs the life of the patients. The preparation method has simple technique, can improve the quality of the medicine and effectively improve the clinic treatment effect of the medicine.