The invention discloses a bone setting plaster and a preparation method thereof. The bone setting plaster comprises traditional Chinese medicine bone setting paste and fresh ginger paste, wherein magnets are arranged in the traditional Chinese medicine bone setting paste which is distributed on non-woven fabric, the upper end of the traditional Chinese medicine bone setting paste is covered with apearlescent protective film A, the fresh ginger paste is distributed on a nonwoven perforated pressure-sensitive adhesive tape, the upper end of the fresh ginger paste is covered with a pearlescent protective film B, the bone setting plaster is sealed in a sealed bag and stored, and the traditional Chinese medicine bone setting paste is prepared from rhizoma drynariae, radix angelicae sinensis, ground beetle and cortex eucommiae. By means of the bone setting plaster, the clinical healing standard can be met in about one month for most fracture patients after operative or manipulative reduction; the bone setting plaster is short in external application time, takes effect quickly, is convenient to use and can also have a healing effect on delayed healing or non-healing of fracture; a few medicines are used but have specific effects, and the medicines are common, low in cost and convenient to produce massively; the traditional Chinese medicine bone setting paste and the fresh ginger paste are sealed and stored separately, the fresh ginger paste is not needed to prepare for instant use and is convenient to use; the magnets are arranged and can promote blood circulation, alleviate swelling and relieve pain.