The invention discloses a processing method for a mercerized knitted bedding fabric. The processing method mainly adopts a production technology of double-calcination single yarn, first refining and then mercerizing, and grey yarn is sequentially subjected to yarn singeing, yarn steaming, knitting, grey cloth singeing, refining, dewatering, cylinder drying, mercerizing, dyeing, dewatering, scutching, drying, printing, forming and pre-shrinking and finally is checked and stored in a cabin. The mercerized knitted bedding fabric has the advantages of high conformality, low shrinkage, wide width and the like, and can meet the requirement on the knitted bedding fabric; compared with a woven fabric, the mercerized knitted bedding fabric has higher elasticity, water absorption and air permeability, is more smooth and fine in handfeel, and has better comfortableness.