The invention relates to a traditional Chinese medicinal composition for treating insomnia, and a preparation method thereof, and belongs to the field of traditional Chinese medicines. The traditional Chinese medicinal composition comprises 8-13g of Bupleurum chinense DC., 4-8g of Rhizoma arisaematis, 5-10g of American ginseng, 6-10g of Juncus effusus, 10-15g of pearl shells, 5-10g of Cortex Albiziae, 10-15g of Chinese yam, 5-7g of licorice root, 10-15g of Poria cocos, 10-15g of Semen Nelumbinis, 10-15g of immature bitter orange, 10-15g of Radix Polygalae, 10-15g of unprocessed keel, 5-10g of spine date seeds, 5-10g of Folium Phyllostachys, 10-15g of lily, 5-10g of chrysanthemum flower, 10-15g of Radix Puerariae, 5-10g of Radix Curcumae Aromaticae, 10-15g of Chinese magnoliavine, 10-15g of Dens Draconis, 8-12g of Chinese Eaglewood, 10-15g of peach seeds, 4-8g of oysters and 5-10g of Fructus Citri Sarcodactylis. A traditional Chinese medicinal capsule for treating insomnia, prepared from various Chinese herbal medicines, has the advantages of no toxic or side effects, easily available raw materials, and short cure course, has good treatment effects on sleep insufficiency, difficulty falling asleep, early awakening, sleeplessness after waking, frequent waking from a nightmare, nightmare suffering all night, and no energy recovery after sleep, and also has a good treatment effect on many discomfort symptoms and spirits associated with insomnia.