The invention discloses a traditional Chinese medicine composition for treating skin cancer, which includes the following components in parts by weight: 250-1000 parts of roots of camphor trees, 25-125 parts of stinkbugs, and appropriate amount of Baijiu 60 degrees or above. The traditional Chinese medicine composition is prepared through soaking roots of camphor trees and live stinkbugs in Baijiu, the raw materials are simple and easy to obtain, the use of live stinkbugs turns harm into wealth, and through the interaction of effective constituents of roots of camphor trees and live stinkbugs, the obtained traditional Chinese medicine composition can be used for effectively treating skin cancer, quickly takes effect, effective in treatment, low in cost, and facilitates popularization and application; besides, the invention also discloses a preparation method of the traditional Chinese medicine composition and application in preparation of pharmaceutic preparation for treating skin cancer or daily use chemical detergents, and more choices are provided for treatment of skin cancer.