The invention provides an effective component of CLMD (Chaihu-jia-Longgu-Muli-Decoction) for treating mental sickness and an extraction method of the effective component. The method comprises the steps as follows: radix bupleuri, os draconis, baical skullcap roots, sliced ginger, minium, ginseng, peeled cassia twig, poria cocos, washed pinellia ternate, rhubarb, decocted concha ostreae and six jujubes are weighed in a weight proportion of a CLMD prescription; the twelve ingredients are added with water for decoction and subjected to centrifugation; petroleum ether extraction, ethyl acetate extraction and n-butyl alcohol extraction are sequentially and respectively performed after supernatant is concentrated; the n-butyl alcohol part is subjected to vacuum drying and ground to obtain n-butanol extract; the n-butanol extract is ground and added with water for dissolving, passes an AB-8 macroreticular resin column and is eluted by water, 10% of aqueous ethanol, 30% of aqueous ethanol, 50% of aqueous ethanol, 70% of aqueous ethanol and 90% of aqueous ethanol sequentially; and 10% of eluent is collected, concentrated and dried to obtain 10% of CLM effective component. Compared with an original CLMD compound, the effective component remarkably improves nerve cell protection and repair effects, the dosage is reduced, the medicine compliance is enhanced, and storage and transportation are facilitated; and further, the nerve cell protection and repair effects of the effective component are equivalent to or better than those of conventional foreign medicine commonly used in clinic for treating the metal sickness.