The invention discloses a traditional Chinese medicine composition for relieving the exterior syndrome, ventilating the lung, relieving cough and reducing phlegm and a preparation method thereof, belonging to the field of modernization of traditional Chinese medicines. The traditional Chinese medicine composition for relieving the exterior syndrome, ventilating the lung, relieving cough and reducing phlegm is prepared from the following raw materials as active ingredients in parts by weight: 80 parts of thunberg fritillary bulb, 80 parts of rhizoma pinelliae preparata, 80 parts of balloon flower, 80 parts of dried orange peel, 80 parts of figwort root, 64 parts of licorice, 64 parts of tuckahoe, 24 parts of costus root, 80 parts of radix peucedani, 80 parts of bitter orange, 80 parts of kudzu root, 80 parts of trichosanthes root and 80 parts of bitter almonds. According to the research results of physicochemical properties and pharmacological effects of the ingredients contained in the medicines, a reasonable and stable preparation method of the active ingredients is obtained. The medicine prepared by adopting the technical scheme disclosed by the invention has the advantages that the quality is stable and controllable, the curative effect is obviously increased in comparison with the existing dosage form sold on the market, and a patient needs to take a small dose of the medicine. The traditional Chinese medicine composition has obvious economic and social benefits.