The invention discloses a processing method of a linen knitted double-mercerized fabric. The following process flow is adopted for treatment: yarn singeing, yarn mercerizing, clear finishing, dyeing, soft finishing, drying, rewinding, weaving, fabric mercerizing, secondary clear finishing, super soft finishing, hydrophilic setting, preshrinking, examining and packaging. The process provided by the invention is characterized in that linen yarns are pretreated so that the strength of the linen yarns is improved, and therefore, burrs on the surface of the linen yarns are reduced, and the linen yarns are improved in strength, and smooth, and bright and clean in surface, and thus being convenient for next weaving and hand feeling improvement, and secondary mercerization, secondary clear finishing, super soft finishing and hydrophilic setting are adopted in after finishing. The process has the advantages that natural ducts and grooves in natural linen fibers are not blocked, the moisture absorption and sweat releasing properties and the air permeability of the linen fabric are kept, and the fabric is better, softer and smoother than the linen fabric in the prior art. Besides, the process provided by the invention avoids high-difficulty processes such as high-temperature boiling and demineralization; the process is simple and ingenious in design, and therefore, the production cost is effectively saved.