The present invention relates to a traditional Chinese medicine composition for regulating immunity and preparation method thereof, characterized in that the composition comprises raw materials such as Radix Panacis Quinquefolii, Ganoderma, fermented Cordyceps sinensis powder, Flos Rosae Rugosae, and Rhizoma Anemarrhenae and is prepared into various conventional pharmaceutical formulations through processes such as pulverization, water decoction and alcohol extraction. The traditional Chinese medicine composition is effective in preventing and treating allergic diseases, hepatitis B and AIDS, elevating leukocytes, preventing and treating radiation injury, reducing toxic and side effects resulting from radiotherapy and chemotherapy, improving the male sexual function, enhancing immunity of the human body and alleviating physical fatigue.