The invention provides a traditional Chinese medicinal composition for treating infantile diaper rash and a preparation method of the traditional Chinese medicinal composition. The preparation method comprises the following steps: grinding 35-45 parts of calcined gypsum into superfine powder, grinding 3-7 parts of borneol into fine powder, heating and dissolving 5-15 parts of beeswax, 35-45 parts of sesame oil and 3-7 parts of lanolin, filtering and cooling to about 65-70 DEG C; adding the borneol fine powder and dissolving the borneol fine powder, then adding the calcined gypsum superfine powder, completely stirring uniformly to be semi-solidified so as to obtain the traditional Chinese medicinal composition in ointment form. The traditional Chinese medicinal composition disclosed by the invention is used for treating infantile diaper rash caused by accumulation of damp heat, and the composition is adaptive to such fundamental symptoms as skin flushing, swelling, rash, vesicle, drainage, diabrosis and the like; and meanwhile, the traditional Chinese medicinal composition also has a relatively good treatment effect on skin mucosa diseases including inflammatory hemorrhoid, anal fissure, bedsore, herpes zoster, mosquito bite and the like.