The invention discloses soil improvement organic biological fertilizer and a preparation method thereof. The soil improvement organic biological fertilizer comprises the following raw materials in parts by weight: 30 to 35 parts of rice straws, 25 to 30 parts of animal dung, 20 to 25 parts of charcoal, 10 to 15 parts of bean pulp, 5 to 10 parts of diatom ooze, 2 to 2.5 parts of soddy soil, 2 to 3 parts of zeolite powder, 3 to 4 parts of a microbial agent, 2 to 3 parts of sodium benzoate, 2 to 3 parts of monoammonium phosphate, 2 to 3 parts of mugwort, 2 to 2.5 parts of licorice, 1 to 2 parts of calcium chloride, 1 to 2 parts of amino acid, 1 to 2 parts of starch, 1 to 2 parts of molasses powder, and 1 to 2 parts of humic acid. The soil improvement organic biological fertilizer takes plant waste as the raw material, not only is beneficial to improve the soil quality, but also can reduce the production cost, thereby improving the physicochemical property of soil, comprehensively improving the soil structure, and enabling the soil quality to achieve the effects of softness, permeability, moisture holding and fertilizer maintenance, and optimizes the composting process by preferentially selecting organic waste converted products capable of passivating heavy metal and enhancing the fertilizer efficiency of organic fertilizer, such as charcoal, biological humic acid of and the like, as compost base materials, so as to achieve the purpose of producing environmental high-quality organic fertilizer.