The invention relates to a traditional Tibetan medicine composition for treating liver diseases and a preparation method thereof. The composition is prepared from 10-30 parts of turquoise, 10-30 parts of tabasheer, 20-60 parts of safflower, 4-10 parts of saffron, 25-75 parts of Meconopsis, 15-50 parts of Herba Dracocephali Tangutici, 15-50 parts of Corydalis impatiens, 15-50 parts of rock refine cream, 10-30 parts of clove, 2-5 parts of artificial ox gallstone, 10-30 parts of Indian false swertia herb, 5-15 parts of semen hertospermi, 2-5 parts of petrified bouquet and 1-3 parts of artificial musk. The preparation method comprises the following steps: evenly mixing the active pharmaceutical ingredients, micro-pulverizing into 0.01-100 mu m, adding conventional medicinal auxiliary materials, and preparing pills, micro-pills, dropping pills, tablets, capsules, granules, dispersible tablets and other clinically acceptable preparation formulations, or preparing bagged beverages or canned beverages. The composition can effectively treat liver diseases, and therefore, is very suitable for clinical popularization.