Belonging to the field of modernization of traditional Chinese medicines, the invention discloses a medicinal composition for treating chronic cough of children and its preparation method. The active components of the medicinal composition for treating chronic cough of children are prepared by the following raw materials by weight: 400 parts of gypsum, 200 parts of loquat leaves, 200 parts of bamboo shavings, 200 parts of mulberry leaves, 100 parts of rhizoma pinellinae praeparata, 100 parts of tussilago farfara, 100 parts of mulberry bark, 100 parts of semen lepidii, 20 parts of acorus gramineus, 100 parts of pumice (calcined), 50 parts of wrinkled gianthyssop herbs, 100 parts of perilla seeds (stir-fried), 50 parts of honeysuckle stems, 100 parts of bitter apricot kernels (stir-fried), 20 parts of agilawood, 100 parts of stiff silkworms (stir-fried), and 6 parts of ephedra. The medicinal composition of the invention has the advantages of: stable and controllable quality, substantially improved curative effect compared with existing sold preparation forms, reduced taking dosage by patients, enhanced bioavailability, as well as obvious economic and social benefits.