The invention discloses a medicine for treating diabetes and its preparation method, which is a Tibetan medicine and also known as Jiumei thirst quenching and glucose reduction No.3. The medicine for treating diabetes is composed of active components or active components and auxiliary materials which can be accepted by pharmacy, wherein, the active components are prepared by pleurospermum hoffm, rhizoma polygonati, asparagi radix, Mirablis himalaica and tribulus terrstris according to certain weight ratio. The medicine for treating diabetes can be prepared into any general dosage form for oral administration. The medicine for treating diabetes is capable of nourishing kidney yin, promoting the production of body fluid to relieve thirst, and benefiting qi and lowering sugar. The medicine of the invention can be used for treating diabetes. From the Tibetan medicine aspect, the medicine of the invention is used for treating the thirst quenching symptoms of polydipsia, polyphagia, polyuria, emaciation, urine sugar and raised blood sugar caused by imbalance of root culturing. From the traditional Chinese medicine aspect, the medicine of the invention is used for treating diabetes caused by deficiency of qi and yin, such as polydipsia, polyphagia, polyuria, emaciation, fatigue and weakness of diabetes, spontaneous perspiration and night sweating, shortness of breath and no desire tospeak, burning sensation of five centers, cardiopalmus and insomnia, red tongue with scant liquid, macroglossia, thin tongue fur or exfoliative tongue, small and wiry pulse or small pulse, urine sugar, raised blood sugar and the like.