The invention discloses a traditional Chinese medicine composition used for curing chronic hepatitis and a preparation method thereof. The traditional Chinese medicine composition is made of raw material medicines with the weight proportion by parts: 40 to 160 parts of Chinese thorowax root, 40 to 160 parts of debark peony root, 40 to 160 parts of angelica, 40 to 160 parts of India madder root, 40 to 160 parts of largehead atractylodes rhizome, 40 to 160 parts of Tuckahoe, 40 to 160 parts of turtle carapace, 40 to 160 parts of massa medicata fermentata hunanensis, 60 to 240 parts of Codonopsis pilosula nannfeldt, 60 to 240 parts of Lalang Grass Rhizome, 24 to 96 parts of immature orange fruit, 20 to 80 parts of green tangerine peel, 12 to 48 parts of villous amomum fruit, 12 to 48 parts of earthworm and 12 to 48 parts of liguorice. The traditional Chinese medicine composition of the invention has the pharmacological efficacies of antagonizing hepatic damage, protecting liver, regulating immune function, reducing aminopherase, improving liver function and on the like, and the clinical efficacy observation experiments prove that the traditional Chinese medicine composition has the exact efficacies to the chronic hepatitis, in particular to chronic active hepatitis, chronic persisting hepatitis and early cirrhosis; and the clinical application is of safety and no toxicity and side effects.