The invention relates to a pencil and a manufacturing method thereof, in particular to a plant powder based plastic pencil. A pencil holder of the pencil comprises the following components in percentage by weight: 40-80wt% of plant powder, 15-50wt% of resin carrier, 1-5wt% of plasticizer, 1-5wt% of coupling agent, and 0.5-3wt% of foaming agent. The invention further discloses a manufacturing method of the plant powder based plastic pencil, and the method comprises the steps of: raw material mixing, granulating, heating, synchronous molding of a pencil holder, a pencil peel and a cartridge, and the like. The plant powder based plastic pencil provided by the invention can replace a wooden pencil, has the advantages of good strength and toughness, easiness for peeling, no toxicity and environmental friendliness, simple production process and low cost, is beneficial to reduction of consumption in wood and fossil energy, and has the effects of saving energy, being low-carbon and protectingthe environment.