The invention discloses skin-whitening yellow-removal toilet soap and a preparation method thereof, belonging to the technical field of washing products. The toilet soap is prepared by the steps of mixing a traditional Chinese medicine composition with a soap base in a mass ratio of 1 to 1, and pressing, wherein the traditional Chinese medicine composition is prepared from the following raw materials in parts by weight: 6-12 parts of chrysanthemum, 4-10 parts of rhizoma atractylodis macrocephalae, 3-9 parts of fructus ligustri lucidi, 6-12 parts of liquorice, 4-8 parts of angelica, 3-9 parts of rhizoma pinelliae, 2-8 parts of semen pharbitidis, 2-6 parts of rhizoma polygonati odorati, 3-9 parts of fructu broussonetiae and 4-8 parts of herba schizonepetae. The skin-whitening yellow-removal toilet soap is capable of effectively treating skin diseases such as acnes, pimples, whelks, chloasma, freckles and dry and chapped skin, effectively eliminating free radicals in the skin, inhibiting the generation of peroxides and eliminating brown pigments in skin and has the efficacies of moistening skin, nourishing and whitening face and removing freckles.