The invention relates to a compound dendrobium candidum hypoglycemic composition and a preparation method thereof. The compound dendrobium candidum hypoglycemic composition is prepared from the following Chinese traditional medicine raw materials in weight ratio: 2-40g of dendrobium candidum, 5-80g of prepared rehmannia root, 5-80g of Chinese wolfberry, 5-80g of dogwood, 5-80g of dodder, 5-80g of milk vetch, 5-80g of wolfberry bark, 2-40g of coptis, 5-80g of rhizoma atractylodis, 5-80g of gallnut, 5-80g of root-bark of tree peony and 2-40g of licorice. The compound dendrobium candidum hypoglycemic composition provided by the invention can improve the immunity of the human body, regulate the equilibrium between yin and yang of the human body, obviously reduce the blood sugar level, obviously improve the symptoms of diabetes, enhance the memory, nourish the consumptive disease of the five internal organs, resist the aging, inhibit the tumor and resist the anoxia, has an obvious effect on diabetes with deficiency of both qi and yin and blood stasis syndrome and vascular complications thereof, is suitable for treating diabetes complicated with coronary heart disease, cerebral vascular diseases, peripheral vascular diseases, retinopathy, diabetic nephropathy and the like, and does not have toxic or side effects.