The invention discloses an external traditional Chinese medicine preparation for treating tinea unguium and tinea manus and pedis and a preparation method of the external traditional Chinese medicine preparati. The external traditional Chinese medicine preparati is made of sweet wormwood, golden cypress, flos carthami, fructus psoraleae, fructus cnidii, hydnocarpus anthelminticus, cortex pseudolaricis, Chinese prickly ash, alum, folium artemisiae argyi, radix euphorbiae lantu, borneol, polygonatum kingianum, rhizoma polygonati odorati, mint, radix angelicae dahuricae, radix gentianae, lalang grass rhizome, unprocessed rehmannia roots, medical salicylic acid, medical Bingpeng powder and white vinegar. The external traditional Chinese medicine preparation comprises the traditional Chinese medicines combined as raw materials, has synergistic interactions, is capable of enhancing blood circulation, warming blood and qi and regulating mental states, is adopted for treating tinea unguium and tinea manus and pedis, has a good treatment effect, and is convenient to use and thorough in elimination, free of reoccurrences, and free of toxic and/or side effects.