The invention discloses a preparation method and an application method of a drug and herb medicine thereof for curing chronic hepatitis B. The drug is characterized by comprising the following raw materials: root bark of the peony tree, fructus gardeniae, spica prunellae, radix curcumae, rose, radix bupleuri, stir-baked radix paeoniae alba, fructus aurantii, citrus chachiensis hortorum, prepared rhizoma cyperi, rhizoma ligustici Chuanxiong, radix saposhnikoviae, astragalus root, baked rhizoma atractylodis macrocephalae, radix codonopsis pilosulae from Shanxi of China, tuckahoe, poria cum ligno hospite, semen lablab album, Chinese yam rhizome, lotus seed meat, radix glycyrrhizae preparata, baked coix seeds, fructus amomi, radix platycodonis, baked rice-grain sprout, baked wheat sprout, baked hawthorn, baked massa medicata fermentata, fried endothelium corneum gigeriae galli , rhizome alismatis , semen cuscutae, herba epimedii, cortex eucommiae, radix dipsaci from Sichuan of China, herba taxilli, tadix morindae officinalis, dried rhizome of rehmannia, radix rehmanniae preparata, mulberry, radix salviae miltiorrhizae, radix angelicae sinensis, radix paeoniae rubra, capillary wormwood, flos chrysanthemi indici, herba dendrobii, rhizoma smilacis glabrae, herba hedyotis, broken sporoderm spores, colla corni cervi, colla corii asini, glue of tortoise plastron, sugar, honey and yellowwine. The drug is proved in clinical experiment that the drug has characteristics of good healing effect on chronic hepatitis B and high safety and is worth of being clinically used and popularized.