The invention discloses a traditional Chinese medicine composition for blackening and generating hair and a preparation method thereof. An orally taken medicament comprises 10 to 30 portions of radix codonopsitis, 10 to 30 portions of hoantchy root, 10 to 30 portions of angelica, 10 to 30 portions of prepared fleece-flower root, 10 to 30 portions of Chinese arborvitae twig, 10 to 30 portions of yerbadetajo herba ecliptae, 10 to 30 portions of prepared rhizome of rehmannia, 10 to 30 portions of mulberry, 10 to 30 portions of fruit of glossy privet, 10 to 30 portions of vaccinium bracteatum thumb leaves, 10 to 30 portions of rhizoma polygonati, 10 to 30 portions of medlar, 10 to 30 portions of black sesame, and 10 to 30 portions of dodder; and an externally applied medicament comprises 20 to 40 portions of fleece-flower root, 20 to 40 portions of salvia miltiorrhiza, 20 to 40 portions of Chinese arborvitae twig, 20 to 40 portions of vaccinium bracteatum thumb leaves, 20 to 40 portions of fruit of glossy privet, 10 to 30 portions of Szechuan lovage rhizome, 10 to 30 portions of dittany bark, 20 to 40 portions of yerbadetajo herba ecliptae, 20 to 40 portions of dodder, 10 to 30 portions of tuber onion seed, and 20 to 40 portions of ginger. The traditional Chinese medicine composition has functions of nourishing liver, strengthening the spleen, tonifying the kidney, tonifying qi and tonifying the blood, nourishing Yin and hair, and can effectively prevent losing hair. The preparation method is economical, practical and simple, and can obtain good economic benefit.