In this paper, a novel method based on gas chromatography-mass spectrometry (GC-MS) following microwave distillation-headspace solid-phase microextraction (MD-HS-SPME) was developed for the determination of essential oil in dry traditional Chinese medicine (TCM). TCM is dried before being preserved and used, there is too little water to absorb microwave energy and heat the TCM samples. In the work, carbonyl iron powders (CIP) was added and mixed with the dried TCM sample, which was used as microwave absorption solid medium for dry distillation of the TCM. At the same time, SPME was used for the extraction and concentration of essential oil after MD. The dry rhizomes of Atractylodes lancea DC was used as the model TCM, and used in the study. The MD-HS-SPME parameters including fiber coating, microwave power, irradiation time, and the amount of added CIP, were studied. To demonstrate the method feasibility, the conventional HS-SPME method was also used for the analysis of essential oil in the TCM. Experimental results show that more compounds were isolated and identified by MD-HS-SPME than those by HS-SPME. Compared to conventional HS-SPME, the advantages of the proposed method are: short extraction time and high extraction efficiency. All experimental results show that the proposed method is an alternative tool for fast analysis of essential oils in dry TCMs.